Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 03, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | Heritage Insurance Holdings, Inc. | ||
Entity Central Index Key | 0001598665 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 62,160,178 | ||
Entity Common Stock, Shares Outstanding | 25,558,751 | ||
Entity Shell Company | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Title of each class | Common Stock, par value $0.0001 per share | ||
Trading Symbol(s) | HRTG | ||
Name of each exchange on which registered | NYSE | ||
Entity File Number | 001-36462 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 45-5338504 | ||
Entity Address, Address Line One | 1401 N. Westshore Blvd. | ||
Entity Address, City or Town | Tampa | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 33607 | ||
City Area Code | 727 | ||
Local Phone Number | 362-7200 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
ICFR Auditor Attestation Flag | true | ||
Auditor Name | Plante & Moran, PLLC | ||
Auditor Location | Denver, Colorado | ||
Auditor Firm ID | 166 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the Registrant’s Proxy Statement for its Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K, provided that if such Proxy Statement is not filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K, an amendment to this Form 10-K shall be filed no later than the end of such 120-day period. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Fixed maturities, available-for-sale, at fair value (amortized cost of $705,547 and $675,245) | $ 635,572 | $ 669,354 |
Equity securities, at fair value, (cost $1,514 and $1,415) | 1,514 | 1,415 |
Other investments | 16,484 | 23,929 |
Total investments | 653,570 | 694,698 |
Cash and cash equivalents | 280,881 | 359,337 |
Restricted cash | 6,691 | 5,415 |
Accrued investment income | 3,817 | 3,167 |
Premiums receivable, net | 92,749 | 71,925 |
Reinsurance recoverable on paid and unpaid claims, net of allowance for credit losses of $45 | 805,059 | 269,391 |
Prepaid reinsurance premiums | 306,977 | 265,873 |
Income taxes receivable | 12,118 | 11,739 |
Deferred income tax asset, net | 16,841 | 0 |
Deferred policy acquisition costs, net | 99,617 | 93,881 |
Property and equipment, net | 25,729 | 17,426 |
Right-of-use lease asset, finance | 20,132 | 22,718 |
Right-of-use lease asset, operating | 7,335 | 5,035 |
Intangibles, net | 49,575 | 55,926 |
Goodwill | 0 | 91,959 |
Other assets | 11,509 | 12,272 |
Total Assets | 2,392,600 | 1,980,762 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Unpaid losses and loss adjustment expenses | 1,131,807 | 590,166 |
Unearned premiums | 656,641 | 590,419 |
Reinsurance payable | 199,803 | 191,728 |
Long-term debt, net | 128,943 | 120,757 |
Deferred income tax liability, net | 0 | 9,426 |
Advance premiums | 26,516 | 24,504 |
Accrued compensation | 6,594 | 8,014 |
Lease liability, finance | 22,557 | 24,621 |
Lease liability, operating | 8,690 | 6,551 |
Accounts payable and other liabilities | 80,010 | 71,525 |
Total Liabilities | 2,261,561 | 1,637,711 |
Commitments and contingencies (Note 17) | ||
Stockholders’ Equity: | ||
Common stock, $0.0001 par value, 50,000,000 shares authorized, 25,564,433 shares issued and 25,539,433 outstanding at December 31, 2022 and 26,803,511 shares issued and 26,753,511 outstanding at December 31, 2021 | 3 | 3 |
Additional paid-in capital | 334,711 | 332,797 |
Accumulated other comprehensive income, net of taxes | (53,585) | (4,573) |
Treasury stock, at cost, 12,231,674 shares and 10,536,737 shares at December 31, 2022 and December 31, 2021 | (130,900) | (123,557) |
Retained (deficit) earnings | (19,190) | 138,381 |
Total Stockholders' Equity | 131,039 | 343,051 |
Total Liabilities and Stockholders' Equity | $ 2,392,600 | $ 1,980,762 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Fixed maturities, at amortized cost | $ 705,548 | $ 675,245 |
Equity securities, cost | 1,514 | 1,415 |
Reinsurance recoverable net of allowance for credit losses | $ 45 | $ 45 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 37,796,107 | 37,340,248 |
Common stock, shares outstanding | 25,539,433 | 26,753,511 |
Treasury stock, shares | 12,231,674 | 10,536,737 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive (Loss) Income - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
REVENUES: | ||||
Gross premiums written | $ 1,275,031 | $ 1,164,879 | $ 1,080,100 | |
Change in gross unearned premiums | (66,207) | (20,717) | (83,258) | |
Gross premiums earned | 1,208,824 | 1,144,162 | 996,842 | |
Ceded premiums earned | (571,759) | (533,091) | (452,120) | |
Net premiums earned | 637,065 | 611,071 | 544,722 | |
Net investment income | 11,977 | 5,652 | 12,302 | |
Net realized (losses) gains | (258) | (16) | 22,395 | |
Other revenue | 13,676 | 14,854 | 13,966 | |
Total revenues | 662,460 | 631,561 | 593,385 | |
EXPENSES: | ||||
Losses and loss adjustment expenses | 501,162 | 427,370 | 373,387 | |
Policy acquisition costs, net of ceding commission income | [1] | 156,304 | 145,968 | 128,276 |
General and administrative expenses, net of ceding commission income | [2] | 70,396 | 65,787 | 81,537 |
Goodwill impairment | 91,959 | 60,500 | 0 | |
Total expenses | 819,821 | 699,625 | 583,200 | |
Operating (loss) income | (157,361) | (68,064) | 10,185 | |
Interest expense, net | 8,809 | 7,970 | 7,972 | |
(Loss) income before income taxes | (166,170) | (76,034) | 2,213 | |
Benefit for income taxes | (11,807) | (1,307) | (7,113) | |
Net (loss) income | (154,363) | (74,727) | 9,326 | |
OTHER COMPREHENSIVE (LOSS) INCOME | ||||
Change in net unrealized gains (losses) on investments | (64,335) | (13,661) | 20,738 | |
Reclassification adjustment for net realized investment losses (gains) | 258 | (64) | (22,395) | |
Income tax benefit (expense) related to items of other comprehensive (loss) income | 15,065 | 3,095 | 384 | |
Total comprehensive (loss) income | $ (203,375) | $ (85,357) | $ 8,053 | |
Weighted average shares outstanding | ||||
Basic | 26,343,826 | 27,804,355 | 27,978,519 | |
Diluted | 26,343,826 | 27,804,355 | 27,988,966 | |
(Loss) earnings per share | ||||
Basic | $ (5.86) | $ (2.69) | $ 0.33 | |
Diluted | $ (5.86) | $ (2.69) | $ 0.33 | |
[1] Policy acquisition costs includes $ 46.5 million, $ 47.1 million and $ 43.0 million of ceding commission income for the reporting years 2022, 2021 and 2020, respectively . General and administration includes $ 15.4 million, $ 15.6 million and $ 14.1 million of ceding commission income for the reporting years 2022, 2021 and 2020, respectively . |
Consolidated Statements of Op_2
Consolidated Statements of Operations and Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Ceding commission income | $ 61,848 | $ 62,721 | $ 57,134 |
Policy Acquisition Costs [Member] | |||
Ceding commission income | 46,500 | 47,100 | 43,000 |
General and Administrative Expenses [Member] | |||
Ceding commission income | $ 15,400 | $ 15,600 | $ 14,100 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member] | Common Shares [Member] | Common Shares [Member] Cumulative Effect, Period of Adoption, Adjusted Balance [Member] | Additional Paid-In-Capital [Member] | Additional Paid-In-Capital [Member] Cumulative Effect, Period of Adoption, Adjusted Balance [Member] | Retained Earnings (Deficit) [Member] | Retained Earnings (Deficit) [Member] Cumulative Effect, Period of Adoption, Adjustment [Member] | Retained Earnings (Deficit) [Member] Cumulative Effect, Period of Adoption, Adjusted Balance [Member] | Treasury Stock [Member] | Treasury Stock [Member] Cumulative Effect, Period of Adoption, Adjusted Balance [Member] | Accumulated Other Comprehensive Income (Deficit) [Member] | Accumulated Other Comprehensive Income (Deficit) [Member] Cumulative Effect, Period of Adoption, Adjusted Balance [Member] |
Beginning Balance at Dec. 31, 2019 | $ 448,799 | $ 448,765 | $ 3 | $ 3 | $ 329,568 | $ 329,568 | $ 217,266 | $ 217,232 | $ (105,368) | $ (105,368) | $ 7,330 | $ 7,330 | ||
Beginning Balance (ASU 2016-13 [Member]) at Dec. 31, 2019 | $ (34) | $ (34) | ||||||||||||
Beginning Balance, Shares at Dec. 31, 2019 | 28,650,918 | 28,650,918 | ||||||||||||
Net unrealized change in investments, net of tax | (1,273) | (1,273) | ||||||||||||
Surrendered shares for tax withholding | (2,384) | (2,384) | ||||||||||||
Shares tendered for income taxes withholding, Shares | (247,223) | |||||||||||||
Restricted stock vested | 260,267 | |||||||||||||
Issued restricted stock, Shares | 15,000 | |||||||||||||
Repurchase of common stock/Stock buy-back | (9,997) | (9,997) | ||||||||||||
Repurchase of common stock/Stock buy-back, Shares | (930,356) | |||||||||||||
Stock-based compensation on restricted stock | 4,683 | 4,683 | ||||||||||||
Deferred tax adjustment for credit expected losses | (4) | (4) | ||||||||||||
Cash dividends declared | (6,772) | (6,772) | ||||||||||||
Net (loss) income | 9,326 | 9,326 | ||||||||||||
Ending balance at Dec. 31, 2020 | 442,344 | $ 3 | 331,867 | 219,782 | (115,365) | 6,057 | ||||||||
Ending balance, Shares at Dec. 31, 2020 | 27,748,606 | |||||||||||||
Net unrealized change in investments, net of tax | (10,630) | (10,630) | ||||||||||||
Surrendered shares for tax withholding | (231) | (231) | ||||||||||||
Shares tendered for income taxes withholding, Shares | (28,257) | |||||||||||||
Restricted stock vested | 35,267 | |||||||||||||
Issued restricted stock, Shares | 254,793 | |||||||||||||
Repurchase of common stock/Stock buy-back | $ (8,192) | (8,192) | ||||||||||||
Repurchase of common stock/Stock buy-back, Shares | (1,256,898) | (1,256,898) | ||||||||||||
Stock-based compensation on restricted stock | $ 1,161 | 1,161 | ||||||||||||
Cash dividends declared | (6,674) | (6,674) | ||||||||||||
Net (loss) income | (74,727) | (74,727) | ||||||||||||
Ending balance at Dec. 31, 2021 | 343,051 | $ 3 | 332,797 | 138,381 | (123,557) | (4,573) | ||||||||
Ending balance, Shares at Dec. 31, 2021 | 26,753,511 | |||||||||||||
Net unrealized change in investments, net of tax | (49,012) | (49,012) | ||||||||||||
Surrendered shares for tax withholding | (94) | (94) | ||||||||||||
Shares tendered for income taxes withholding, Shares | (28,271) | |||||||||||||
Restricted stock vested | 25,000 | |||||||||||||
Issued restricted stock, Shares | 496,552 | |||||||||||||
Forfeiture on restricted stock | (12,422) | |||||||||||||
Repurchase of common stock/Stock buy-back | $ (7,343) | (7,343) | ||||||||||||
Repurchase of common stock/Stock buy-back, Shares | (1,694,937) | (1,694,937) | ||||||||||||
Stock-based compensation on restricted stock | $ 2,008 | 2,008 | ||||||||||||
Cash dividends declared | (3,208) | (3,208) | ||||||||||||
Net (loss) income | (154,363) | (154,363) | ||||||||||||
Ending balance at Dec. 31, 2022 | $ 131,039 | $ 3 | $ 334,711 | $ (19,190) | $ (130,900) | $ (53,585) | ||||||||
Ending balance, Shares at Dec. 31, 2022 | 25,539,433 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | |||
Aug. 03, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||||
Common stock, dividends, per share, declared | $ 0.06 | $ 0.12 | $ 0.24 | $ 0.24 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
OPERATING ACTIVITIES | |||
Net (loss) income | $ (154,363) | $ (74,727) | $ 9,326 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Stock-based compensation | 2,008 | 1,161 | 4,683 |
Bond amortization and accretion | 3,121 | 4,054 | 5,229 |
Amortization of original issuance discount on debt | 1,037 | 1,784 | 1,415 |
Depreciation and amortization | 8,359 | 8,449 | 8,101 |
Allowance for bad debt | (1) | 0 | 161 |
Net realized gains | 258 | (64) | (22,395) |
Net change for unrealized gains (losses) in other investments | 0 | 80 | 0 |
Net loss from sale of asset | (399) | 168 | 9 |
Deferred income taxes, net of acquired | (11,202) | (5,956) | 6,238 |
Goodwill impairment | 91,959 | 60,500 | 0 |
Changes in operating assets and liabilities: | |||
Accrued investment income | (650) | (430) | 1,640 |
Premiums receivable, net | (20,823) | 5,547 | (13,948) |
Prepaid reinsurance premiums | (41,104) | (20,055) | (21,716) |
Reinsurance premiums receivable and recoverable | (535,668) | 85,646 | 73,823 |
Income taxes receivable | (379) | 20,485 | (29,053) |
Deferred policy acquisition costs, net | (5,736) | (4,616) | (12,054) |
Right-of-use asset, net | 286 | (21,292) | (185) |
Other assets | 763 | (729) | 291 |
Unpaid losses and loss adjustment expenses | 541,641 | (69,175) | 45,808 |
Unearned premiums | 66,222 | 20,801 | 83,398 |
Reinsurance payable | 8,075 | 29,810 | 5,567 |
Accrued interest | (3) | 26 | (214) |
Leasehold incentives | 1,622 | 0 | 0 |
Advance premiums | 2,012 | 6,236 | 1,764 |
Accrued compensation | (1,420) | (1,311) | 3,978 |
Lease liability | 75 | 23,017 | 214 |
Other liabilities | 10,050 | (9,278) | 18,131 |
Net cash (used in) provided by operating activities | (34,260) | 60,130 | 170,211 |
INVESTING ACTIVITIES | |||
Fixed maturity securities sales, maturities and paydowns | 93,726 | 208,527 | 492,216 |
Fixed maturity securities purchases | (127,400) | (334,584) | (450,463) |
Equity securities sales | 0 | 184 | 26 |
Equity securities purchases | 0 | 0 | (6) |
Return on other investments | 14,945 | 2,400 | 0 |
Other investment purchases | (7,599) | 0 | (20,034) |
Leasehold improvements | (3,825) | 0 | 0 |
Proceeds from other investments sold | 848 | 0 | 1,078 |
Software in progress | (6,884) | 0 | 0 |
Cost of property and equipment acquired | (1,673) | (1,007) | (755) |
Net cash (used in) provided by investing activities | (37,862) | (124,480) | 22,062 |
FINANCING ACTIVITIES | |||
Proceeds from term loan facility | 35,000 | 2,782 | 0 |
Repurchase of convertible notes | (22,529) | 0 | 0 |
Mortgage loan payments | (322) | (306) | (290) |
Principal payments on term loan facility | (5,000) | (4,625) | (9,375) |
Tax withholding on share-based compensation awards | (94) | (231) | (2,384) |
Purchase of treasury stock | (7,343) | (8,192) | (9,997) |
Dividends paid | (4,770) | (6,709) | (6,852) |
Net cash used in financing activities | (5,058) | (17,281) | (28,898) |
(Decrease) increase in cash, cash equivalents, and restricted cash | (77,180) | (81,631) | 163,375 |
Cash, cash equivalents and restricted cash, beginning of period | 364,752 | 446,383 | 283,008 |
Cash, cash equivalents and restricted cash, end of period | 287,572 | 364,752 | 446,383 |
Supplemental Cash Flows Information: | |||
Income taxes (refunded) paid, net | (285) | 528 | 15,691 |
Interest paid | 7,837 | 5,282 | 6,206 |
Supplemental Disclosure of Non-Cash Investing and Financing Activities | |||
Conversion of promissory notes into Class A Preferred Units | 0 | 0 | 7,500 |
Non-cash acquisition of shares of common stock | $ 0 | $ 2,100 | $ 0 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Cash Flows [Abstract] | ||||
Cash and cash equivalents | $ 280,881 | $ 359,337 | ||
Restricted cash | 6,691 | 5,415 | ||
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows | $ 287,572 | $ 364,752 | $ 446,383 | $ 283,008 |
Basis of Presentation, Nature o
Basis of Presentation, Nature of Business and Significant Accounting Policies and Practices | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation, Nature of Business and Significant Accounting Policies and Practices | Note 1. Basis of Presentation, Nature of Business and Significant Accounting Policies and Practices Business Description Heritage Insurance Holdings, Inc. is an insurance holding company. Our insurance subsidiaries are Heritage Property & Casualty Insurance Company (“Heritage P&C”), Zephyr Insurance Company (“Zephyr”), Narragansett Bay Insurance Company (“NBIC”) and Pawtucket Insurance Company (“PIC”). PIC is currently inactive and has no policies in force or outstanding claims. Our other subsidiaries include: Heritage MGA, LLC (“MGA”), the managing general agent that manages substantially all aspects of our insurance subsidiaries’ business; Contractors’ Alliance Network, LLC, our vendor network manager; Skye Lane Properties, LLC, our property management subsidiary; Osprey Re Ltd., our reinsurance subsidiary that may provide a portion of the reinsurance protection purchased by our insurance subsidiaries; Heritage Insurance Claims, LLC, an inactive subsidiary reserved for future development; Zephyr Acquisition Company (“ZAC”); NBIC Holdings, Inc., and NBIC Service Company which provides services to NBIC. Our primary products are personal and commercial residential insurance, which we currently offer in Alabama, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Rhode Island, South Carolina, and Virginia. We conduct our operations under a single reporting segment. Basis of Presentation The consolidated financial statements include the accounts of Heritage Insurance Holdings, Inc. and its wholly-owned subsidiaries. The accompanying consolidated financial statements include the accounts of the Company and all other entities in which the Company has a controlling financial interest (none of which are variable interest entities). All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with United States Generally Accepted Accounting Principles (“U.S. GAAP”) requires us to make estimates and assumptions about future events that affect the amounts reported in our consolidated financial statements and accompanying notes. We evaluate our estimates on an ongoing basis when updated information related to such estimates becomes available. We base our estimates on historical experience and information available to us at the time these estimates are made. Actual results could differ materially from these estimates. Cash and Cash Equivalents The Company’s cash and cash equivalents include demand deposits with financial institutions and short-term, highly-liquid financial instruments with original maturities of three months or less when purchased. The carrying amounts reported in the consolidated balance sheets for interest bearing deposits approximate their fair value because of the short maturity of these financial instruments. To the extent there are negative cash balances with any individual financial institution, the Company excludes the negative amount from cash and cash equivalents neg ative cash balances and reports as accounts payable and other liabilities. Restricted Cash Restricted cash related to individual state regulatory deposits was $ 6.7 and $ 5.4 million for the years ended December 31, 2022 and 2021, respectively. The Company earned interest income of $ 12,612 and $ 11,918 on its restricted cash deposits. Investments Fixed-Maturity Securities The Company classifies all of its investments in debt securities as available-for-sale and reports them at fair value. Subsequent to its acquisition of debt securities available-for-sale, the Company records changes in value through the date of disposition as unrealized holding gains and losses, net of tax effects, and includes them as a component of other comprehensive income. Refer to Note 2 “Investments” to these consolidated financial statements for further information. Short-term Securities Short-terms securities have an original maturity of less than one year and are carried at amortized cost, which approximates fair value. Accumulated Other Comprehensive Income Accumulated other comprehensive income consists solely of unrealized gains and losses on debt securities available-for-sale, net of tax. Investment Gains and Losses Net realized investment gains and losses are included as a component of pre-tax revenues based upon specific identification of the investments sold on the trade date. Included in net realized and unrealized gains (losses) are credit impairment losses on invested assets other than those investments accounted for using the equity method of accounting described in the “Allowance for Credit Losses” and “Impairment of Other Investments” section discussed below. Allowance for Credit Losses (Available-for-Sale-Debt Securities) The impairment model for available-for-sale (“AFS”) debt securities differs from the current expected credit loss (“CECL”) methodology applied for held to maturity debt securities because AFS debt securities are measured at fair value rather than amortized cost. Although ASC 326 replaced the legacy other-than-temporary impairment (“OTTI”) model with a credit loss model, it retained the fundamental nature of the legacy OTTI model. For AFS debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either criteria is met, the security’s amortized cost basis is written down to fair value through income. For AFS debt securities where neither of the criteria are met, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the credit rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited to the amount that the fair value is less than the amortized cost basis. Under the guidance, an entity may no longer consider the length of time fair value has been less than amortized cost. As of December 31, 2022 and 2021, management evaluated and determined a credit allowance was not significant to the financial statements. Other Investments Non-Consolidating Variable Interest Entities (“VIEs”) The Company makes passive investments in limited partnerships (“LPs”), corporations, and a Real Estate Investment Trust (“REIT”). The Company determines at the inception of each arrangement whether an entity in which it has made an investment or in which it has other variable interests is considered a variable interest entity ("VIE"). The Company consolidates VIEs when it is determined to be the primary beneficiary. The Company is the primary beneficiary of a VIE when it has the power to direct activities that most significantly affect the economic performance of the VIE and has the obligation to absorb the majority of their losses or entitled to benefits. If the Company is not the primary beneficiary in a VIE, it will account for the investment or other variable interests in a VIE in accordance with applicable GAAP. For the year ended December 31, 2022 and 2021, the Company was not the primary beneficiary to any of its other investments and therefore considered the other investments as non-consolidated VIEs. Equity securities that do not result in consolidation and are not accounted for under the equity method, are measured at fair value. Equity securities without a readily determinable fair value are reported at cost, less impairment, unless we identify observable price changes in orderly transactions for the identical or a similar investment of the same issuer (measurement alternative). Changes in fair value are reflected in the Company’s consolidated statements of operations. Certain other investments provide the Company with monthly or quarterly return on capital on a regular schedule. Impairment of Other Investments The Company maintains various interests in other investments without a readily determinable fair value that are evaluated for impairment at each reporting period. When such events or changes occur, the Company evaluates the estimated present value of future cash flows compared to its cost basis in the investment to evaluate whether there may be an impairment. For the year ended December 31, 2022, the Company recorded no impairment charges on its other investments compared to recording an impairment of $ 2.2 million for the year ended December 31, 2021. Fair Value Major categories of financial assets and liabilities, including short-term investments, other assets and derivatives are measured at fair value on a recurring basis. Certain assets and liabilities are measured at fair value on a nonrecurring basis when impaired, which include long-lived assets, goodwill, asset retirement obligations and other investments that the Company cannot significantly influence. Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the principal or most advantageous market in which we would transact is analyzed. Assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of non-performance, are considered. The Company estimates the fair value of its investments using the closing prices on the last business day of the reporting period, obtained from active markets such as the NYSE and NASDAQ. For securities for which quoted prices in active markets are unavailable, the Company uses observable inputs such as quoted prices in inactive markets, quoted prices in active markets for similar instruments, benchmark interest rates, broker quotes and other relevant inputs. The Company does not have any investments in its portfolio which require the use of unobservable inputs. The Company’s estimate of fair value reflects the interest rate environment that existed as of the close of business on December 31, 2022. Changes in interest rates after December 31, 2022 may affect the fair value of the Company’s investments. The Company’s non-financial assets, such as goodwill and intangible assets, are carried at cost until there are indicators of impairment and are recorded at fair value only when an impairment charge is recognized. Refer to Note 3 “ Goodwill and Other Intangible Assets ” to these consolidated financial statements for further information on our 2021 and 2022 goodwill impairment charges. At December 31, 2022, all goodwill had been written off. Long term debt is recorded at carrying value, Refer to Note 14 “ Long-Term Debt” to these consolidated financial statements for further information. Premiums The Company records direct and assumed premiums written as revenue on a daily pro rata basis over the contract period of the related in force policies or reinsurance contract. For any portion of premiums not earned at the end of the reporting period, the Company records an unearned premium liability. Premiums receivable represents amounts due from our policyholders for billed premiums and related policy fees. We perform a policy-level evaluation to determine the extent to which the balance of premiums receivable exceeds the balance of unearned premiums. When we receive payments on amounts previously charged off, we reduce bad debt expense in the period we receive the payment. Balances in premiums receivable and the associated allowance account are removed upon cancellation of the policy due to non-payment. An allowance of $ 451,000 was recorded as of December 31, 2022 and 2021. Bad debt expense related to uncollectible premiums was $ 0 , $ 0 and $ 161,300 for the years ended December 31, 2022, 2021 and 2020, respectively. When the Company receives premium payments from policyholders prior to the effective date of the related policy, the Company records an advance premiums liability. On the policy effective date, the Company reduces the advance premium liability and records the premiums as described above. Policy Acquisition Costs The Company incurs policy acquisition costs that vary with, and are directly related to, the production of new business. Policy acquisition costs consist of the following four items: (i) commissions paid to outside agents at the time of policy issuance; (ii) policy administration fees paid to a third-party administrator at the time of policy issuance; (iii) premium taxes; and (iv) inspection fees. The Company capitalizes policy acquisition costs to the extent recoverable, then the Company amortizes those costs over the contract period of the related policy. We earn ceding commission on our quota share reinsurance contracts. Our accounting policy is to allocate ceding commission between policy acquisition costs and general and administrative expenses for financial reporting purposes. Ceding commission is allocated between policy acquisition costs and general and administrative expenses based upon the proportion these costs bear to production of new business. For the years ended December 31, 2022 and 2021, we earned ceding commission income of $ 61.9 million and $ 62.7 million of which $ 46.5 million and $ 47.1 million was allocable to policy acquisition costs. Ceding commission income is deferred and recognized over the quota share contract period. The amount and rate of ceding reinsurance commissions earned on the net quota share contract can slide within a prescribed minimum and maximum, depending on loss performance and how future losses develop. Premium Deficiency Reserve At each reporting date, the Company determines whether it has a premium deficiency. A premium deficiency would result if the sum of the Company’s expected losses, deferred policy acquisition costs, and policy maintenance costs (such as costs to store records and costs incurred to collect premiums and pay commissions) exceeded the Company’s related unearned premiums plus investment income. Should the Company determine that a premium deficiency exists, the Company would write off the unrecoverable portion of deferred policy acquisition cost. Reinsurance The Company follows industry practice of reinsuring a portion of our risks. Reinsurance involves transferring, or “ceding”, all or a portion of the risk exposure on policies the Company writes to another insurer, known as a reinsurer. To the extent that the Company’s reinsurers are unable to meet the obligations they assume under the Company’s reinsurance agreements, the Company remains liable for the entire insured loss. As a result, a reasonable possibility exists that an estimated recovery may change significantly in the near term from the amounts included in the Company’s consolidated financial statements. The Company’s reinsurance agreements are generally short-term, prospective contracts. The Company records an asset, prepaid reinsurance premiums, and a liability, reinsurance payable, for the entire contract amount upon commencement of new reinsurance agreements. The Company amortizes its prepaid reinsurance premiums over the 12-month contract period. When the Company incurs losses recoverable under its reinsurance program, the Company records amounts recoverable from its reinsurers on paid losses plus an estimate of amounts recoverable on unpaid losses. The estimate of amounts recoverable on unpaid losses is a function of the Company’s liability for unpaid losses associated with the reinsured policies; therefore, the amount changes in conjunction with any changes to the estimate of unpaid losses. Given that an estimate of amounts recoverable from reinsurers on unpaid losses may change at any point in the future because of its relation to the Company’s reserves for unpaid losses, a reasonable possibility exists that an estimated recovery may change significantly from initial estimates. The Company remains liable for claims payments if any reinsurer is unable to meet its obligations under the reinsurance agreements. 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 concentration of credit risk arising from similar geographic regions, activities or economics characteristics of the reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. The Company contracts with a diverse population of reinsurers to secure its annual reinsurance coverage, for which the excess of loss treaties generally become effective June 1st each year. Allowance for Credit Losses for Reinsurance Recoverables The allowance for credit losses for reinsurance recoverable is evaluated based on historical loss experience adjusted for current events and reasonable and supportable forecasts from both internal and external sources. The Company monitors the credit quality of its reinsurance recoverables through the use of A.M. Best’s Financial Strength rating ("FSR"), or in the absence of an FSR consideration of credit ratings issued by approved rating agencies such as S&P, Moody’s, or Fitch. At December 31, 2022, the determination of the allowance for credit losses on reinsurance recoverables included analysis of (i) reinsurance recoverable balances by reinsurer FSR, (ii) estimated payment patterns associated with the claims underlying the reinsurance balances and (iii) historical default rates by reinsurer FSR as published by A.M. Best. In addition to the quantitative analysis, qualitative factors considered include but are not limited to (i) global reinsurer capital level, (ii) reinsurance market trends, (iii) the interest rate environment and (iv) the stressed global economy. Reinsurance recoverables are reported on the consolidated balance sheets net of the CECL allowance, if any. Long-Lived Assets—Property and Equipment Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation is calculated on a straight-line basis over the estimated useful lives as follows: building— 40 years ; computer hardware and software 3-years ; office and furniture equipment— 3 to 7 years . Leasehold improvements are amortized over the shorter of the lease term or the asset’s useful life. Expenditures for improvements are capitalized to the property accounts. Replacements and maintenance and repairs that do not improve or extend the life of the respective assets are expensed as incurred. Capitalized Software Costs associated with the implementation of certain internal systems are capitalized and carried at capitalized less accumulated amortization once they are it is placed in service and are included as a component of fixed assets on the Company’s consolidated balance sheet. Costs capitalized include internal personnel costs, external developer costs, and interest. The implementation costs relate to systems built on software which the Company purchased or licensed and developed both internally and with third party vendors. As such, capitalized costs will be amortized over the term of the useful life of the software. Leases We lease office space under finance and operating leases with expiration dates through 2031 . We determine whether an arrangement constitutes a lease and record lease liabilities and right-of-use assets on our consolidated balance sheets at lease commencement. We primarily use our incremental borrowing rates for our operating leases (rates are not readily determinable) and implicit rates for our financing leases in determining the present value of lease payments. We measure right-of-use assets based on the corresponding lease liability adjusted for (i) payments made to the lessor at or before the commencement date, (ii) initial direct costs we incur and (iii) tenant incentives under the lease. We begin recognizing rent expense when the lessor makes the underlying asset available to us, we do not assume renewals or early terminations unless we are reasonably certain to exercise these options at commencement, and we do not allocate consideration between lease and non-lease components. For short-term leases, we record rent expense in our consolidated statements of operations on a straight-line basis over the lease term and record variable lease payments as incurred. Goodw ill and Intangible Assets On January 1, 2020, the Company adopted ASU 2017-04, Simplifying the Test for Goodwill Impairment (ASC 350) ("ASU 2017-04"), which changed the guidance on goodwill impairment. Under the guidance, the qualitative assessment of the recoverability of goodwill remains the same, but the second step of the two-step quantitative test, which required calculation of the implied fair value of goodwill, has been eliminated. Instead, an impairment charge is recognized when the carrying value of a reporting unit exceeds its fair value. Any excess of carrying value over fair value is written down as an impairment. This evaluation is performed annually, during the fourth quarter or more frequently if facts and circumstances warrant. An impairment loss would be recognized if, and to the extent that, the carrying value of goodwill exceeded the implied value. The remaining balance of goodwill was written off during the second quarter of 2022. The Company reviews amortizable intangible assets for impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. If the Company concludes that impairment exists, the carrying amount is reduced to fair value. Refer to Note 3 “ Goodwill and Other Intangible Assets ” to these consolidated financial statements, for further information on our 2022 goodwill impairment charge. " Unpaid Losses and Loss Adjustment Expenses The Company’s reserves for unpaid losses and loss adjustment expenses represent the estimated ultimate cost of settling all reported claims plus all claims we incurred related to insured events that have occurred as of the reporting date, but that policyholders have not yet reported to the Company (incurred but not reported, or “IBNR”). The reserve for unpaid losses is the estimate of amounts necessary to settle all reported and unreported incurred claims for the ultimate cost of insured losses, based upon the facts of each case and the Company’s experience with similar cases. Salvage and subrogation are deducted from the reserve for claims and claims expense on a cash basis. The establishment of appropriate reserves, including reserves for catastrophe losses, is an inherently uncertain and complex process. Reserve estimates are primarily derived using an actuarial estimation process in which historical loss patterns are applied to actual paid losses and reported losses (paid losses plus individual case reserves established by claim adjusters) for an accident or report year to create an estimate of how losses are likely to develop over time. Development factors are calculated quarterly and periodically throughout the year for data elements such as claims reported and settled, paid losses, and paid losses combined with case reserves. The historical development patterns for these data elements are used as the assumptions to calculate reserve estimates, including the reserves for reported and unreported claims. Reserve estimates are regularly reviewed and updated, using the most current information available. Any resulting re-estimates are reflected in current results of operations. The Company reports its reserves for unpaid losses and loss adjustment expenses gross of the amounts related to unpaid losses recoverable from reinsurers and reports loss and loss adjustment expenses net of amounts ceded to reinsurers. The Company does not discount its loss reserves for financial statement purposes. Other Revenue Our insurance affiliates may charge policyholders a policy fee on each policy written; to the extent these fees are not subject to refund, and the Company recognizes the income immediately when collected, which coincide with related service obligations. The Company also charges pay-plan fees to policyholders that pay its premiums in more than one installment and records the fees as income when collected. Other income also includes rental income due under non-cancelable leases for space at the Company’s commercial property. Assessments Guaranty fund and other insurance-related assessments imposed upon the Company’s insurance company affiliates are recorded as policy acquisition costs in the period the regulatory agency imposes the assessment. To recover assessments which are paid in advance to the guaranty fund or other insurance-related entity, the Company recoups such assessments from our policyholders in the form of a policy surcharge. Once the recoupment period begins, the entire recoupment amount is recorded as an asset on our balance sheet. There were no such assessments during the periods presented. The Company collects pass through assessments imposed upon policyholders as a policy surcharge and records the amounts collected as a liability until the Company remits the amounts to the regulatory agency that imposed the assessment. Convertible Notes In August 2017 and September 2017, the Company issued collectively $ 136.8 million of 5.875 % Convertible Senior Notes (the “Convertible Notes”) due August 1, 2037 . As of December 31, 2022, the Company has approximately $ 885,000 of the Convertible Notes outstanding. This amount is net of $ 21.1 million of Convertible Notes reacquired and held by an insurance company subsidiary. Refer Note 14 “ Long-Term Debt” to these consolidated financial statements for further information . Debt Issuance and Discount Costs In connection with the issuance of debt, any debt issuance and discount costs are reflected on the balance sheet as an offset to long-term debt and amortized using the effective interest method over the life of the underlying debt instrument. As of December 31, 2022, all debt issuance and discount costs have been fully amortized. Stock-Based Compensation The Company measures stock-based compensation at the grant date based on the fair value of the award and recognizes stock-based compensation expense over the requisite vesting period in accordance with ASC Topic 718, Compensation—Stock Compensation . For awards with performance-based vesting conditions expense is not recognized until it is determined that it is probable the performance-based conditions will be met. When achievement of a performance-based condition is probable, a catch-up of expense will be recorded as if the award had been vesting on a straight line basis from the award date. The award will continue to be expensed on a straight-line basis until probability of achieving the performance-based conditions changes, if applicable. Earnings Per Share Basic net earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the reporting period. Diluted net earnings per share is computed by dividing net income by the weighted average number of common and common equivalent shares outstanding during the reported period. Common equivalent shares include incremental shares from diluted vested and unvested shares of restricted common stock and convertible notes outstanding during the period based on the "if converted" method under the guidance of ASU 2020-06, adopted by the Company on January 1, 2022. Income tax Income taxes are accounted for under the asset and liability method, that recognizes the amount of income taxes payable or refundable for the current year and recognizes deferred tax assets and liabilities based on the tax rates expected to be in effect during the periods in which the temporary differences reverse. Temporary differences arise when income or expenses are recognized in different periods in the consolidated financial statements than on the tax returns. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that all, or some portion, of the benefits related to deferred tax assets will not be realized. Income taxes includes both estimated federal and state income taxes. Reclassification Certain prior year amounts have been reclassified to conform to the current year presentation. Accounting Pronouncements Adopted In August 2020, the FASB issued ASU 2020-06, "Accounting for Convertible Instruments and Contracts in an Entity's Own Equity". The ASU i) simplifies the accounting for convertible debt and convertible preferred stock by reducing the number of accounting models, and amends certain disclosures, ii) amends and simplifies the derivative scope exception guidance for contracts in an entity's own equity, including share-based compensation, and iii) amends the diluted earnings per share calculations for convertible instruments and contracts in an entity's own equity. The if-converted method will be the only permissible method for computing the dilutive effect of the convertible debt instruments. Interest expense no longer includes amortization of debt discount. The Company adopted the guidance of ASU 2020-06 on January 1, 2022, reporting no material impact to the Company's consolidated condensed financial statements or disclosures for the year ended December 31, 2022. Accounting Pronouncements Not Yet Adopted The Company describes below recent pronouncements that may have a significant effect on its consolidated financial statements or on its disclosures upon future adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on, or are unrelated to, its financial condition, results of operations, or related disclosures. In March 2022, the FASB issued ASU 2022-02, “2022-02 Financial Instruments-Credit Losses” (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”). ASU 2022-02 requires that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases. ASU 2022-02 is effective for annual periods beginning after December 15, 2022, including interim periods within those periods. Early adoption is permitted. The Company will adopt ASU 2022-02 during the first quarter of 2023 and will provide the required disclosures, if determined to be material. In June 2022, the FASB issued ASU 2022-03 , Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). ASU 2022-03 clarifies that a contractual sales restriction on an equity security is not considered when determining the security's fair value. This ASU was issued to eliminate diversity in practice by clarifying that contractual arrangements restricting an entity's ability to sell the security for a certain period of time is a characteristic of the reporting entity and should not be contemplated when determining the security's fair value. ASU 2022-03 requires new disclosures that provide investors with information about the restriction, including the nature and remaining duration of the restriction. The ASU is effective for annual periods beginning after December 15, 2023, including interim periods within those annual periods. Early adoption is permitted. We are currently evaluating the impact of this guidance. Although there are several other new accounting pronouncements issued by the FASB, the Company does not believe any of these accounting pronouncements have or will have a material impact on its consolidated financial statements. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Note 2. Investments The amortized cost, gross unrealized gains and losses, and fair value of the Company’s debt securities available-for-sale are as follows: December 31, 2022 Cost or Adjusted / Gross Unrealized Gross Unrealized Fair Value (in thousands) Debt Securities Available-for-sale U.S. government and agency securities (1) $ 121,811 $ 24 $ 4,093 $ 117,742 States, municipalities and political subdivisions 104,361 — 12,734 91,627 Special revenue 284,946 1 34,817 250,130 Industrial and miscellaneous 194,430 90 18,447 176,073 Total $ 705,548 $ 115 $ 70,091 $ 635,572 (1) Includes securities at December 31, 2022 with a carrying amount of $ 24.3 million that were pledged as collateral for the advance agreement entered into with a financial institution in 2018. The Company is permitted to withdraw or exchange any portion of the pledged collateral over the minimum requirement at any time. The Company’s unrealized losses on corporate bonds have not been recognized because the bonds are of a high credit quality with investment grade ratings. The decline in fair value is deemed to be caused by rising interest rates resulting in no credit loss allowance recorded for the year ended December 31, 2022. December 31, 2021 Cost or Adjusted / Gross Unrealized Gross Unrealized Fair Value (in thousands) Debt Securities Available-for-sale U.S. government and agency securities (1) $ 73,923 $ 184 $ 282 $ 73,825 States, municipalities and political subdivisions 106,727 242 1,270 105,699 Special revenue 291,005 1,084 3,520 288,569 Hybrid securities 99 — — 99 Industrial and miscellaneous 203,491 636 2,965 201,162 Total $ 675,245 $ 2,146 $ 8,037 $ 669,354 (1) Includes securities at December 31, 2021 with a carrying amount of $ 22.5 million that were pledged as collateral for the advance agreement entered into with a financial institution in 2018. The Company is permitted to withdraw or exchange any portion of the pledged collateral over the minimum requirement at any time. The table below summarizes the Company’s fixed maturity securities at December 31, 2022 and 2021 by contractual maturity periods. Actual results may differ as issuers may have the right to call or prepay obligations, with or without penalties, prior to the contractual maturity of those obligations. December 31, 2022 Cost or Amortized Cost Percent of Total Fair Value Percent of Total Debt Securities Available-for-sale (in thousands) (in thousands) Due in one year or less $ 115,959 16 % $ 113,683 18 % Due after one year through five years 344,554 49 % 314,420 49 % Due after five years through ten years 182,793 27 % 150,906 25 % Due after ten years 62,242 9 % 56,564 9 % Total $ 705,548 100 % $ 635,572 100 % December 31, 2021 Cost or Amortized Cost Percent of Total Fair Value Percent of Total Debt Securities Available-for-sale (in thousands) (in thousands) Due in one year or less $ 42,200 6 % $ 42,323 6 % Due after one year through five years 311,799 46 % 309,744 46 % Due after five years through ten years 224,654 33 % 220,777 33 % Due after ten years 96,592 15 % 96,510 15 % Total $ 675,245 100 % $ 669,354 100 % Actual maturities may differ from the contractual maturities because borrowers may have certain prepayment conditions. Net Realized and Unrealized (Losses) Gains The proceeds from the sale of debt securities were $ 27.1 million, $ 30.4 million and $ 381.2 million for the years ended December 31, 2022, 2021 and 2020, respectively. The following table presents net realized (losses) gains on the Company’s debt securities available-for-sale for the years ended December 31, 2022, 2021 and 2020, respectively: For the Years ended December 31, 2022 2021 2020 Realized Gains (Losses) Fair Value at Sale Realized Gains (Losses) Fair Value at Sale Realized Gains (Losses) Fair Value at Sale (in thousands) Debt Securities Available-for-sale Realized gains $ 37 $ 4,836 $ 716 $ 26,029 $ 22,466 $ 374,863 Realized losses ( 295 ) 22,245 ( 652 ) 4,359 ( 71 ) 6,368 Net realized (losses) gains $ ( 258 ) $ 27,081 $ 64 $ 30,388 $ 22,395 $ 381,231 The following table presents the reconciliation of net realized and unrealized (losses) gains on the Company’s investments reported for the years ended December 31, 2022, 2021 and 2020, respectively: For the Year Ended December 31, 2022 2021 2020 (in thousands) Gross realized gains on sales of available-for-sale securities $ 64 $ 716 $ 22,466 Gross realized losses on sales of available-for-sale securities ( 322 ) ( 652 ) ( 71 ) Gross realized and unrealized gains in other investments — 2,100 — Impairment charge in other investments — ( 2,180 ) — Net realized and unrealized (losses) gains $ ( 258 ) $ ( 16 ) $ 22,395 Equity Investments For the years ended December 31, 2022, 2021 and 2020, the Company had no net holding realized and unrealized gains or (losses) reported. The following table presents the Company's equity investments as of December 31, 2022 and 2021, respectively. For the Year Ended December 31, 2022 2021 Common stock $ — $ — Membership Shares 1,514 1,415 Total equity investments $ 1,514 $ 1,415 Net Investment Income The following table summarizes the Company’s net investment income by major investment category for the years ended December 31, 2022, 2021 and 2020, respectively: For the Year Ended December 31, 2022 2021 2020 (in thousands) Debt securities available-for-sale $ 11,037 $ 7,220 $ 12,067 Equity securities 50 — — Cash and cash equivalents 2,257 71 223 Other investments 693 1,435 1,100 Net investment income 14,037 8,726 13,390 Investment expenses 2,060 3,074 1,088 Net investment income, less investment expenses $ 11,977 $ 5,652 $ 12,302 Unrealized Losses on Debt Securities The following tables present, for all debt securities available-for-sale in an unrealized loss position, for which no allowance for credit loss is established (including securities pledged), the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position: Less Than Twelve Months Twelve Months or More December 31, 2022 Number of Gross Fair Value Number of Gross Fair Value (in thousands) Debt Securities Available-for-sale U.S. government and agency securities 61 $ 2,040 $ 56,389 36 $ 2,053 $ 56,389 States, municipalities and political subdivisions 28 1,967 17,730 95 10,767 68,852 Special revenue 273 5,832 57,881 259 28,985 167,384 Industrial and miscellaneous 95 1,535 32,387 197 16,912 134,462 Total 457 $ 11,374 $ 164,386 587 $ 58,717 $ 427,087 Less Than Twelve Months Twelve Months or More December 31, 2021 Number of Gross Fair Value Number of Gross Fair Value (in thousands) Debt Securities Available-for-sale U.S. government and agency securities 43 $ 282 $ 57,420 — $ — $ — States, municipalities and political subdivisions 98 1,270 80,972 — — — Special revenue 253 3,485 195,450 14 35 1,214 Industrial and miscellaneous 191 2,387 146,746 18 578 11,598 Total 585 $ 7,424 $ 480,588 32 $ 613 $ 12,812 The Company’s unrealized losses on corporate bonds have not been recognized because the bonds are of a high credit quality with investment grade ratings. The Company does not intend to sell and it is unlikely the Company will be required to sell the securities prior to their anticipated recovery, and the decline in fair value is deemed due to changes in interest rates and other market conditions. The debt issuers continue to make timely principal and interest payments on the bonds. After taking into account these and other factors previously described, the Company believes these unrealized losses generally were caused by a decrease in market interest rates since the time the securities were purchased and not as a result of credit losses. Other Investments Non-Consolidated Variable Interest Entities (“VIEs”) The Company makes passive investments in limited partnerships (“LPs”), which is accounted for using the equity method, with income reported in net realized and unrealized gains and losses. The Company also makes passive investments in a Real Estate Investment Trust (“REIT”) and Insuretech company, which are accounted for using the measurement alternative method, which is reported at cost less impairment (if any), plus or minus changes from observable price changes, as described in the table below. The following table summarizes the Company’s non-consolidated VIEs by category at December 31, 2022 and 2021 (in thousands): Carrying Value For the Year Ended December 31, Balance Sheet Method 2022 2021 Other Real Estate LLC Other Investments Equity Method $ 1,508 $ 1,843 Real Estate Corporation (1) Other Investments Measure Alternative 2,377 2,977 Preferred Interests (2) Other Investments Amortized Cost 8,490 15,000 Non-real estate related (3) Other Investments Equity Method 2,009 2,009 Insurtech Stock (4) Other Investments Measure Alternative 2,100 2,100 Total non-consolidated VIEs $ 16,484 $ 23,929 (1) For the year ended December 31, 2021, a $ 1.0 million impairment was recognized in net realized and unrealized gains (losses) on the Statement of Operations. (2) The preferred membership interests issued originally at $ 7.5 million and $ 9.9 million were measured at amortized cost under the guidance of ASC 320 and are subject to a fixed principal and interest payment schedule with maturity dates of February 1, 2023 and April 1, 2024 , respectively. As of December 31, 2022, the Company received in aggregate a return of capital of approximately $ 14.0 million and executed a new preferred membership interest agreement in aggregate of $ 8.5 million subject to fixed principal and interest schedules with a maturity date of July 1, 2027 . (3) Certain underlying assets of the funds are expected to be liquidated over the period of approximately 3 to 5 years from December 31, 2021. In addition, the Company does not have the ability to redeem or withdraw from the funds, or to sell, assign, or transfer its investment, without the consent of the General Partner or Managers of each fund, but will receive distributions based on the liquidation of the underlying assets and interest processed from the underlying assets. (4) For the year ended December 31, 2021, the Company acquired common shares and warrants of an Insurtech company. The following table summarizes the carrying value and maximum loss exposure of the Company’s non-consolidated VIEs at December 31, 2022 and 2021: As of December 31, 2022 As of December 31, 2021 Carrying Value Maximum Loss Exposure Carrying Value Maximum Loss Exposure (in thousands) Investments in non-consolidated VIEs $ 16,484 $ 16,484 $ 23,929 $ 23,929 The Company’s maximum exposure to loss with respect to these investments is limited to the investment carrying amounts reported as “other investments” in the Company’s consolidated balance sheet. No agreements exist requiring the Company to provide additional funding to any of the non-consolidated VIEs in excess of the Company’s initial investment. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 3. Goodwill and Other Intangible Assets For the years ended December 31, 2022 and 2021, goodwill was $ 0 million and $ 92.0 million, respectively, and intangible assets were $ 49.6 million and $ 55.9 million, respectively. The Company has recorded $ 1.3 million relating to insurance licenses classified as an indefinite lived intangible. Goodwill Amount Balance as of December 31, 2019 $ 152,459 Goodwill acquired — Impairment ( 60,500 ) Balance as of December 31, 2021 $ 91,959 Goodwill acquired — Impairment ( 91,959 ) Balance as of December 31, 2022 $ ( 0 ) The Company utilizes a combination of approaches to value the Company’s single reporting unit. The estimate of fair value was derived from the weighting of the income approach (discounted cash flow model) in conjunction with the market approach (guideline public company method and guideline transaction method) to determine the fair value of the single reporting unit. Management tests goodwill a nd other intangible assets for impairment annually during the fourth quarter, or more frequently should events or changes in circumstances indicate that goodwill or the Company’s other intangible assets might be impaired. During the second quarter of 2022, management determined a triggering event occurred for which it deemed an interim evaluation of goodwill was appropriate and concluded the remaining balance of its goodwill was fully impaired. The carrying value of $ 92.0 million was written off based on the following factors: (i) disruptions in the equity markets, specifically for property and casualty insurance companies, largely due to recent weather-related catastrophe events; (ii) elevated loss ratios for property insurers in the Company’s markets; and (iii) the Company’s market cap was below book value. These factors reduced the Company’s previously modeled fair value of the Company and resulted in a $ 92.0 million goodwill impairment charge, as of the second quarter of 2022, most of which was not tax deductible. Other Intangible Assets Our intangible assets resulted primarily from the acquisitions of Zephyr Acquisition Company and NBIC Holdings, Inc. and consist of brand, agent relationships, renewal rights, customer relations, trade names, non-competes and insurance licenses. Finite-lived intangibles assets are amortized over their useful lives from one to fifteen years . The tables below detail the finite-lived intangible assets, net as of December 31, 2022 and 2021, respectively (amounts in thousands): For the Year Ended December 31, 2022 2021 Amortizing intangible assets (in thousands) Brand $ 1,210 $ 1,210 Agent relationships 15,500 15,500 Renewal rights 57,200 57,200 Customer relations 870 870 Trade names 9,000 9,000 Non-compete 4,790 4,790 88,570 88,570 Accumulated amortization ( 40,310 ) ( 33,959 ) Total infinite-lived intangible assets, net 48,260 54,611 Indefinite-lived intangible assets: License acquired 1,315 1,315 Total intangible assets, net $ 49,575 $ 55,926 Estimated annual pretax amortization of intangible assets for each of the next five years and thereafter is as follows (in thousands): Year Amount 2023 $ 6,351 2024 6,351 2025 6,315 2026 6,114 2027 5,881 Thereafter 17,249 $ 48,260 Amortization expense of intangible assets was $ 6.4 million for each of the years ending December 31, 2022, 2021 and 2020, respectively. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Note 4. Earnings (Loss) Per Share The following table sets forth the computation of basic and diluted net (loss) income per share for the periods indicated: For the Year Ended December 31, 2022 2021 2020 Basic (loss) earnings per share: Net (loss) income attributable to common stockholders (000's) $ ( 154,363 ) $ ( 74,727 ) $ 9,326 Weighted average shares outstanding 26,343,826 27,804,355 27,978,519 Basic (loss) earnings per share: $ ( 5.86 ) $ ( 2.69 ) $ 0.33 Diluted (loss) earnings per share: Net (loss) income attributable to common stockholders (000's) $ ( 154,363 ) $ ( 74,727 ) $ 9,326 Weighted average shares outstanding 26,343,826 27,804,355 27,978,519 Add: Effect of dilutive securities Impact of unvested equity awards — — 10,447 Diluted weighted average common shares outstanding 26,343,826 27,804,355 27,988,966 Diluted (loss) earnings per share: $ ( 5.86 ) $ ( 2.69 ) $ 0.33 The Company had 84,263 and 1,569,236 anti-dilutive shares for the years ended December 31, 2022 and 2021, respectively. The convertible notes were excluded from the computations because the conversion price on these notes was greater than the average market price of our common shares during each of the respective periods, and therefore, would be anti-dilutive to earnings per share under the "if converted" method under the guidance of ASU 2020-06, adopted by the Company on January 1, 2022. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 5. Fair Value Measurements Certain of the Company’s assets are carried at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company employs a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Accordingly, when market observable data are not readily available, the Company’s own assumptions are set to reflect those that market participants would be presumed to use in pricing the asset or liability at the measurement date. Assets and liabilities recorded at fair value on the consolidated balance sheets are categorized based on the level of judgment associated with inputs used to measure their fair value and the level of market price observability, as follows: Level 1 – Unadjusted quoted prices are available in active markets for identical assets/liabilities as of the reporting date. Level 2 – Valuations based on observable inputs, such as quoted prices similar assets or liabilities at the measurement date; quoted prices in the markets that are not active; or other inputs that are observable, either directly or indirectly. Level 3 – Pricing inputs are unobservable and significant to the overall fair value measurement, and the determination of fair value requires significant management judgment or estimation. For the Company’s investments in U.S. government securities that do not have prices in active markets, agency securities, state and municipal governments, and corporate bonds, the Company obtains the fair values from its third-party valuation service and evaluates the relevant inputs, assumptions, methodologies and conclusions associated with such valuations. The valuation service calculates prices for the Company’s investments in the aforementioned security types on a month-end basis by using several matrix-pricing methodologies that incorporate inputs from various sources. The model the valuation service uses to price U.S. government securities and securities of states and municipalities incorporates inputs from active market makers and inter-dealer brokers. To price corporate bonds and agency securities, the valuation service calculates non-call yield spreads on all issuers, uses option-adjusted yield spreads to account for any early redemption features, then adds final spreads to the U.S. Treasury curve as of quarter end. The inputs the valuation service uses in their calculations are not quoted prices in active markets, but are observable inputs, and therefore represent Level 2 inputs. The following table presents information about the Company’s assets measured at fair value on a recurring basis. The Company assesses the levels for the investments at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfer in accordance with the Company’s accounting policy regarding the recognitions of transfers between levels of the fair value hierarchy. For the years ended December 31, 2022 and 2021, there were no transfers in or out of Level 1, 2, and 3. December 31, 2022 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Invested Assets: (in thousands) Debt Securities Available-for-sale U.S. government and agency securities $ 117,742 $ — $ 117,742 $ — States, municipalities and political subdivisions 91,627 — 91,627 — Special revenue 250,130 — 250,130 — Industrial and miscellaneous 176,073 — 176,073 — Total debt securities $ 635,572 $ — $ 635,572 $ — December 31, 2021 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Invested Assets: (in thousands) Debt Securities Available-for-sale U.S. government and agency securities $ 73,825 $ 364 $ 73,461 $ — States, municipalities and political subdivisions 105,699 — 105,699 — Special revenue 288,569 — 288,569 — Hybrid securities 99 — 99 — Industrial and miscellaneous 201,162 — 201,162 — Total debt securities $ 669,354 $ 364 $ 668,990 $ — Non-recurring fair value measurements Assets and liabilities that are measured at fair value on a non-recurring basis include intangible assets and goodwill which are recognized at fair value during the period in which an acquisition is completed, from updated estimates and assumptions during the measurement period, or when they are considered to be impaired. To evaluate such assets for a potential impairment, we determine the fair value of the goodwill and intangible assets using a combination of a discounted cash flow approach and market approaches, which contain significant unobservable inputs and therefore are considered a Level 3 fair value measurement. The unobservable inputs in the analysis generally include future cash flow projections and a discount rate. Certain of our investments in accordance with GAAP for the type of investment, are measured using methodologies other than fair value. The following table presents information for assets measured at an estimated fair value on a nonrecurring basis as of December 31, 2022: Other Investments Carrying Value Balance, January 1, 2022 Amounts impaired Carrying Value Balance, December 31, 2022 (in thousands) Goodwill (1) $ 91,959 $ ( 91,959 ) — Total $ 91,959 $ ( 91,959 ) $ — Other Investments Carrying Value Balance, January 1, 2021 Amounts impaired Carrying Value Balance, December 31, 2021 (in thousands) Goodwill (1) $ 152,459 $ ( 60,500 ) 91,959 Total $ 152,459 $ ( 60,500 ) $ 91,959 (1) Non-cash impairment charge recorded in operating expenses in the consolidated statement of operations by the legal entity or related holding companies acquired. Goodwill that is impaired and subject to nonrecurring fair value measurements is a Level 3 valuation. During the second quarter of 2022, th e Company recorded a goodwill impairment of approximately $ 92.0 million. Management concluded there was a goodwill impairment based on the following factors: (i) disruptions in the equity markets, specifically for property and casualty insurance companies, largely due to recent weather-related catastrophe events; (ii) elevated loss ratios for property insurers in the Company’s markets; and (iii) the Company’s market cap was below book value. For the December 31, 2021, the goodwill impairment charge of $ 60.5 million was recorded following the Company's annual valuation review and principally stemmed from its common stock valuation and prevailing valuation multiples in the property insurance market. The Company used a weighting of the income and market approaches to determine the fair value of the reporting unit. The impairment was based on the following factors: (i) the fair value of our stock trading significantly below book value, (ii) market capitalization control premium; and (iii) financial performance such as a negative or declining cash flows due to recent weather related catastrophes. |
Other Comprehensive Income
Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2022 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Other Comprehensive Income | Note 6. Other Comprehensive Income The following table is a summary of other comprehensive (loss) income and discloses the tax impact of each component of other comprehensive (loss) income for the years ended December 31, 2022, 2021 and 2020, respectively: For the Year Ended December 31, 2022 2021 2020 Pre-tax Tax After- Pre- Tax After- Pre-tax Tax After- (in thousands) Other comprehensive (loss) income Change in unrealized gains on investments, net $ ( 64,335 ) 15,126 $ ( 49,209 ) $ ( 13,661 ) 3,081 $ ( 10,580 ) $ 20,738 $ ( 4,807 ) $ 15,931 Reclassification adjustment of realized (gains) losses included in net (loss) income 258 ( 61 ) 197 ( 64 ) 14 ( 50 ) ( 22,395 ) 5,191 $ ( 17,204 ) Effect on other comprehensive (loss) income $ ( 64,077 ) $ 15,065 $ ( 49,012 ) $ ( 13,725 ) $ 3,095 $ ( 10,630 ) $ ( 1,657 ) $ 384 $ ( 1,273 ) |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Note 7. Other Assets The following table summarizes the Company’s other assets for the years ended December 31, 2022 and 2021: Description December 31, 2022 December 31, 2021 (in thousands) Other amounts receivable $ 1,363 $ 1,934 State underwriting pooling & assoc. 4,697 3,956 Prepaid expense 4,694 6,382 Unallocated Remittances 755 — Total other assets $ 11,509 $ 12,272 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Note 8. Leases The Company has entered into operating and financing leases primarily for real estate and vehicles. The Company will determine whether an arrangement is a lease at inception of the agreement. The operating leases have terms of one to ten years , and often include one or more options to renew . These renewal terms can extend the lease term from two to ten years and are included in the lease term when it is reasonably certain that the Company will exercise the option. The Company considers these options in determining the lease term used in establishing our right-of-use assets and lease obligations. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Because the rate implicit in each operating lease is not readily determinable, the Company uses its incremental borrowing rate to determine present value of the lease payments. The Company used the implicit rates within the finance leases. The components of lease costs were as follows (in thousands) for the respective years: For the Year Ended For the Year Ended Operating lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations $ 1,449 $ 1,359 Finance lease cost: Amortization of assets, included in General & Administrative expenses on the Consolidated Statements of Operations 2,591 1,969 Interest on lease liabilities, included in Interest expense on the Consolidated Statements of Operations 977 785 Total finance lease cost $ 3,568 $ 2,754 Variable lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations $ 952 $ 542 Short-term lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations $ 188 $ 106 Right-of-use lease asset and Lease Liability was as follows (in thousands): Operating Leases December 31, 2022 December 31, 2021 Right of use assets $ 7,335 $ 5,035 Lease liability $ 8,690 $ 6,551 Finance Leases Right of use assets $ 20,132 $ 22,718 Lease liability $ 22,557 $ 24,621 Weighted-average remaining lease term and discount rate for our operating and financing leases was as follows: Weighted-average remaining lease term December 31, 2022 December 31, 2021 Operating lease 6.49 yrs. 6.23 yrs. Finance lease 8.13 yrs. 9.1 yrs. Weighted-average discount rate Operating lease 5.14 % 5.33 % Finance lease 4.16 % 4.18 % Supplemental disclosure of cash flow information related to leases were as follows: For the Year Ended For the Year Ended Cash payments for: (in thousands) Finance lease - Operating cash flows $ 975 $ 291 Finance lease - Financing cash flows $ 2,063 $ 599 Operating lease - Operating cash flows (fixed payments) $ 1,610 $ 1,505 Operating lease - Operating cash flows (liability reduction) $ 1,251 $ 1,133 Maturities of lease liabilities for financing and operating leases were as follows as of December 31, 2022 (in thousands): Financing Lease Operating Lease 2023 $ 3,085 $ 1,593 2024 3,101 1,572 2025 3,166 1,462 2026 3,197 1,469 2027 3,190 1,504 2028 and thereafter 10,920 2,639 Total lease payments 26,659 10,239 Less: imputed interest ( 4,102 ) ( 1,549 ) Present value of lease liabilities $ 22,557 $ 8,690 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 9. Property and Equipment Property and equipment, net consists of the following at December 31, 2022 and 2021: December 31, 2022 December 31, 2021 (in thousands) Land $ 2,582 $ 2,582 Building 9,599 10,141 Software in progress 6,884 — Computer hardware and software 8,851 7,204 Office furniture and equipment 1,381 1,355 Tenant and leasehold improvements 10,485 8,255 Vehicle fleet 594 720 Total, at cost 40,376 30,257 Less: accumulated depreciation and amortization ( 14,647 ) ( 12,831 ) Property and equipment, net $ 25,729 $ 17,426 Through December 31, 2022, the Company had invested approximately $ 6.9 million for software development and implementation services for a new policy, billing and claims system for which one component is anticipated to be completed and placed in service during the third quarter of 2023 with the remaining components anticipated to be placed in service in early 2024. Depreciation expense for the years ended December 31, 2022, 2021 and 2020 was $ 2.0 million, $ 2.1 million, $ 1.6 million, respectively. The Company’s own real estate consists of 13 acres of land, two buildings with a gross area of 88,378 square feet and a parking garage. Expected annual rental income due under non-cancellable operating leases for our real estate properties is as follows (in thousands): Year Amount 2023 $ 3,000 2024 2,751 2025 2,466 2026 2,518 2027 2,569 2028 and Thereafter 14,571 Total $ 27,874 |
Deferred Reinsurance Ceding Com
Deferred Reinsurance Ceding Commission | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Deferred Reinsurance Ceding Commission | Note 10. Deferred Reinsurance Ceding Commission The Company defers certain income in connection with its quota share treaties, the ceded reinsurance commissions income, called deferred reinsurance ceding commissions (“DRCC”), which are deferred and earned over the terms of the reinsurance agreements. Ceding commission on quota share agreements call for provisional ceding rate, subject sliding scale adjustments based on the loss experience of the reinsurers. Adjustments are reflected in current operations. The Company allocates 75 % of total ceding commission income to policy acquisition costs and 25 % of total ceding commission income to general and administrative expense. The Company defers reinsurance ceding commission income, which is amortized over the effective period of the related insurance policies. For the year ended December 31, 2022, 2021 and 2020 the Company allocated ceding commission income of $ 46.5 million, $ 47.1 million and $ 43.0 million to policy acquisition costs and $ 15.4 million, $ 15.6 million and $ 14.1 million to general and administrative expense, respectively. The table below depicts the activity with regard to deferred reinsurance ceding commission during the years ended December 31, 2022, 2021 and 2020. For the Year Ended December 31, 2022 2021 2020 (in thousands) Beginning balance of deferred ceding commission income $ 40,405 $ 39,995 $ 37,464 Ceding commission deferred $ 64,201 63,131 59,664 Less: ceding commission earned $ ( 61,848 ) ( 62,721 ) ( 57,134 ) Ending balance of deferred ceding commission income $ 42,757 $ 40,405 $ 39,995 Deferred ceding commission income is included in Other Liabilities in the Company's consolidated financial statements. |
Deferred Policy Acquisition Cos
Deferred Policy Acquisition Costs | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Deferred Policy Acquisition Costs | Note 11. Deferred Policy Acquisition Costs The Company defers certain costs in connection with written policies, called deferred policy acquisition costs (“DPAC”), which are amortized over the effective period of the related insurance policies. The Company anticipates that its DPAC costs will be fully recoverable in the near term. The table below depicts the activity with regard to DPAC for the years ended December 31, 2022, 2021 and 2020: For the Year Ended December 31, 2022 2021 2020 (in thousands) Beginning Balance $ 93,881 $ 89,265 $ 77,211 Policy acquisition costs deferred $ 202,793 193,106 171,275 Amortization $ ( 197,057 ) ( 188,490 ) ( 159,220 ) Ending Balance $ 99,617 $ 93,881 $ 89,265 |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Reinsurance | Note 12. Reinsurance Overview Reinsurance In order to limit the Company’s potential exposure to individual risks and catastrophic events, the Company purchases significant reinsurance from third party reinsurers. Purchasing reinsurance is an important part of the Company’s risk strategy, and premiums ceded to reinsurers is one of the Company’s largest costs. The Company has strong relationships with reinsurers, which it attributes to its management’s industry experience, disciplined underwriting, and claims management capabilities. For each of the twelve months beginning June 1, 2021 and 2022, the Company purchased reinsurance from the following sources: (i) the Florida Hurricane Catastrophe Fund, a state-mandated catastrophe fund (“FHCF”) for Florida policies only, (ii) private reinsurers, all of which were rated “A-” or higher by A.M. Best Company, Inc. (“A.M. Best”) or Standard & Poor’s Financial Services LLC (“S&P”) or were fully collateralized, and (iii) the Company’s wholly-owned reinsurance subsidiary, Osprey Re Ltd. (“Osprey”). We also sponsored catastrophe bonds in 2022 through Citrus Re Ltd. In addition to purchasing excess of loss catastrophe reinsurance, the Company also purchased quota share, property per risk and facultative reinsurance. The Company’s quota share program limits its exposure on catastrophe and non-catastrophe losses and provides ceding commission income. The Company’s per risk programs limit its net exposure in the event of a severe non-catastrophe loss impacting a single location or risk. The Company also utilizes facultative reinsurance to supplement its per risk reinsurance program where the Company capacity needs dictate. Purchasing a sufficient amount of reinsurance to cover catastrophic losses from single or multiple events or significant non-catastrophe losses is an important part of the Company’s risk strategy. Reinsurance involves transferring, or “ceding”, a portion of the risk exposure on policies we write to another insurer, known as a reinsurer. To the extent that the Company’s reinsurers are unable to meet the obligations they assume under the Company’s reinsurance agreements, the Company remains liable for the entire insured loss. The Company’s insurance regulators require all insurance companies, like us, to have a certain amount of capital and reinsurance coverage in order to cover losses and loss adjustment expenses upon the occurrence of a catastrophic event. The Company’s reinsurance program provides reinsurance in excess of its state regulator requirements, which are based on the probable maximum loss that it would incur from an individual catastrophic event estimated to occur once in every 100 years based on its portfolio of insured risks. The nature, severity and location of the event giving rise to such a probable maximum loss differs for each insurer depending on the insurer’s portfolio of insured risks, including, among other things, the geographic concentration of insured value within such portfolio. As a result, a particular catastrophic event could be a one-in-100-year loss event for one insurance company while having a greater or lesser probability of occurrence for another insurance company. The Company also purchases reinsurance coverage to protect against the potential for multiple catastrophic events occurring in the same year. The Company shares portions of its reinsurance program coverage among its insurance company affiliates. 2022-2023 Reinsurance Towers by Region The following graphics depict our reinsurance program structure for the 2022-2023 hurricane season by region. Millions $ 1,220.3 Layer 4 FL/SE 100 % of $ 100 M xs $ 550 M 100 % $ 1,120.3 Layer 3 100 % of $ 160 M xs $ 390 M 100 % $ 960.3 $ 910.6 FHCF Layer 90 % of 633.7 M 276.9 M 570.3 M) $ 276.9 Layer 2 100 % of $ 250 M xs $ 140 M 100 % $ 140.0 Layer 1 100 % of $ 100 M xs $ 40 M 100 % $ 40.0 Retention FL 1st Event Millions $ 1,220.0 Northeast Only 72.97 % of $ 370 M xs $ 85 0M 100 % Northeast Only Bond 27.03 % of $ 370 M xs $ 850 M $ 850.0 Multi-Zonal 100 % of 300 M xs $ 550 M 100 % $ 550.0 Layer 3 100 % of $ 160 M xs $ 39 0M 100 % $ 390.0 Layer 2 100 % of $ 250 M xs $ 140 M 100 % $ 140.0 Layer 1 100 % of $ 100 M xs $ 40 M 100 % $ 40.0 Retention $ 20.0 Net Quota Share 50 % of $ 20 M NE 1st Event Millions $ 780.0 HI Only 100 % of $ 90 M xs $ 690 M 100 % $ 690.0 Multi-Zonal 100 % of 300 M xs $ 390 M 100 % $ 390.0 Layer 2 100 % of $ 250 M xs $ 140 M 100 % $ 140.0 Layer 1 100 % of $ 100 M xs $ 40 M 100 % $ 40.0 Retention HI 1st Event * xs = in excess 2022-2023 Reinsurance Program Catastrophe Excess of Loss Reinsurance Effective June 1, 2022, the Company entered into catastrophe excess of loss reinsurance agreements covering Heritage Property & Casualty Insurance Company (“He ritage P&C”), Zephyr Insurance Company (“Zephyr”) and Narragansett Bay Insurance Company (“NBIC”). The catastrophe reinsurance programs are allocated among traditional reinsurers, the Florida Hurricane Catastrophe Fund (“FHCF”), Citrus Re and Osprey Re Ltd (“Osprey”), the Company’s captive reinsurer. The FHCF covers Florida risks only and the Company elected to participate at 90 % for the 2022 hurricane season. Osprey Re will provide reinsurance for a portion of the Heritage P&C, NBIC and Zephyr programs. The Company’s third-party reinsurers are either rated “A-” or higher by A.M. Best or S&P or are fully collateralized, to reduce credit risk. Osprey Re is fully collateralized. The reinsurance program, which is segmented into layers of coverage, protects the Company for excess property catastrophe losses and loss adjustment expenses. The 2022-2023 reinsurance program provides first event coverage up to $ 1.2 billion for Heritage P&C, first event coverage up to $ 1.2 billion for NBIC, and first event coverage up to $ 780.0 million for Zephyr. The Company’s first event retention in a 1 in 100-year event would include retention for the respective insurance company as well as any retention by Osprey. The first event maximum retention up to a 1 in 100-year event for each insurance company subsidiary is as follows: Heritage P&C – $ 40.0 million, of which $ 35.0 million would be ceded to Osprey; NBIC – $ 30.0 million of which $ 30 million would be ceded to Osprey in a shared contract with Zephyr; and Zephyr – $ 40 million, of which $ 30 million would be ceded to Osprey in a shared contract with NBIC. The Company is responsible for all losses and loss adjustment expenses in excess of our reinsurance program. For second or subsequent catastrophic events, the Company’s total available coverage depends on the magnitude of the first event, as the Company may have coverage remaining from layers that were not previously fully exhausted. An aggregate of $ 3.2 billion of limit purchased in 2022 includes reinstatement through the purchase of reinstatement premium protection. The amount of coverage, however, will be subject to the severity and frequency of such events. Additionally, the Company placed an occurrence contract for business underwritten by NBIC which covers all catastrophe losses excluding named storms, on Decemb er 31, 2021, expiring December 31, 2022 . The limit on the contract is $ 20.0 million with a retention of $ 20.0 million and has one reinstatement available. The Company placed an aggregate contract for the Company’s business underwritten by NBIC which covers all catastrophe losses excluding named storms, on December 1, 2022, expiring March 31, 2023 . The limit on the contract is $ 20.0 million with an aggregate retention of $ 21.0 million, with a $ 21.0 million per occurrence cap, and a $ 2.0 million franchise deductible. Net Quota Share Reinsurance The Company’s Net Quota Share coverage is pro portional reinsurance, which applies to business underwritten by NBIC, for which certain of the Company’s other reinsurance (property catastrophe excess of loss and the second layer of the general excess of loss) inures to the quota share program. An occurrence limit of $ 20.0 million for catastrophe losses is in effect on the quota share program, subject to certain aggregate loss limits that vary by reinsurer. The amount and rate of ceding commissions slide, within a prescribed minimum and maximum, depending on loss performance. The Net Quota Share program was renewed on December 31, 2022 ceding 41.0 % of the net premiums and losses and 16 % of the prior year quota share is in run off. Per Risk Coverage For losses arising from business underwritten by Heritage P&C and losses arising from commercial residential business underwritten by NBIC, excluding losses from named storms, the Company purchased property per risk coverage for losses and loss adjustment expenses in excess of $ 1.0 million per claim. The limit recovered for an individual loss is $ 9.0 million and total limit for all losses is $ 27.0 million. There are two reinstatements available with additional premium due based on the amount of the layer exhausted. For losses arising from commercial residential business underwritten by NBIC, the Company also purchased property per risk coverage for losses and loss adjustments expenses in excess of $ 750,000 per claim. The limit recovered for an individual loss is $ 250,000 and total limit for all losses is $ 750,000 . There are two reinstatements available with additional premium due based on the amount of the layer exhausted. In addition, the Company purchased facultative reinsurance for losses in excess of $ 10.0 million for any properties it insured where the total insured value exceeded $ 10.0 million. This coverage applies to losses arising from business underwritten by Heritage P&C and losses arising commercial residential business underwritten by NBIC, excluding losses from named storms. General Excess of Loss The Company’s general excess of loss reinsurance protects business underwritten by NBIC and Zephyr multi-peril policies from single risk losses. For the contract period of July 1, 2022 through June 30, 2023, the coverage is $ 2.75 million excess $ 750,000 for property losses and $ 1.25 million excess $ 750,000 for casualty losses. In addition, the Company purchased facultative reinsurance for losses underwritten by NBIC in excess of $ 3.5 million. For a discussion of 2021 -2022 Reinsurance Program please Refer to Part II, Item 8, “Financial Statements and Supplementary Data” further “ Note 12. Reinsurance ” in our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the SEC on March 14, 2022. Effect of Reinsurance The Company’s reinsurance arrangements had the following effect on certain items in the Consolidated Statement of Income for the year ended December 31, 2022, 2021 and 2020: For the Year Ended December 31, 2022 Premiums Written Premiums Earned Losses and Loss (in thousands) Direct $ 1,275,031 $ 1,208,824 $ 1,318,001 Ceded ( 612,863 ) ( 571,759 ) ( 816,839 ) Net $ 662,168 $ 637,065 $ 501,162 For the Year Ended December 31, 2021 Premiums Written Premiums Earned Losses and Loss (in thousands) Direct $ 1,164,879 $ 1,144,162 $ 625,748 Ceded ( 553,147 ) ( 533,091 ) ( 198,378 ) Net $ 611,732 $ 611,071 $ 427,370 For the Year Ended December 31, 2020 Premiums Written Premiums Earned Losses and Loss (in thousands) Direct $ 1,080,100 $ 996,842 $ 609,593 Ceded ( 473,836 ) ( 452,120 ) ( 236,206 ) Net $ 606,264 $ 544,722 $ 373,387 |
Reserve For Unpaid Losses
Reserve For Unpaid Losses | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Reserve for Unpaid Losses | Note 13. Reserve For Unpaid Losses The Company determines the reserve for unpaid losses on an individual-case basis for all incidents reported. The liability also includes amounts which are commonly referred to as incurred but not reported, or “IBNR”, claims as of the balance sheet date. We estimate our IBNR reserves by projecting our ultimate losses using industry accepted actuarial methods and then deducting actual loss payments and case reserves from the projected ultimate losses. The table below summarizes the activity related to the Company’s reserve for unpaid losses: For the Year Ended December 31, 2022 2021 2020 (in thousands) Balance, beginning of period $ 590,166 $ 659,341 $ 613,533 Less: reinsurance recoverable on unpaid losses 301,757 397,688 393,630 Net balance, beginning of period 288,409 261,653 219,903 Incurred related to: Current year 497,428 430,907 392,976 Prior years 3,734 ( 3,537 ) ( 19,589 ) Total incurred 501,162 427,370 373,387 Paid related to: Current year 267,319 247,903 228,394 Prior years 150,126 152,711 103,243 Total paid 417,445 400,614 331,637 Net balance, end of period 372,126 288,409 261,653 Plus: reinsurance recoverable on unpaid losses 759,681 301,757 397,688 Balance, end of period $ 1,131,807 $ 590,166 $ 659,341 The Company believes that the reserve for unpaid losses reasonably represents the amount necessary to pay all claims and related expenses which may arise from incidents that have occurred as of the balance sheet date. The Company’s losses incurred for the year ended December 31, 2022, reflect adverse development of $ 3.7 million and for the years ended December 31, 2021 and 2020 reflect prior year favorable development of $ 3.5 million and $ 19.6 million, respectively, associated with management’s best estimate of actuarial loss and LAE reserves with consideration given to Company specific historical loss experience. The following is information about incurred and paid claims development as of December 31, 2022, net of reinsurance, as well as cumulative claim payments and the total of incurred-but-not-reported liabilities plus expected development on reported claims included within the net incurred claims amounts. The information by accident year is presented as required supplementary information and are unaudited. Incurred Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance (in thousands, except number of claims) Unaudited Accident year 2013 & 2014 2015 2016 2017 2018 2019 2020 2021 2022 Net IBNR Reported 2013 & prior $ 166,922 $ 169,325 $ 169,462 $ 168,497 $ 169,008 $ 168,824 $ 169,192 $ 169,266 $ 169,318 $ 169,542 $ 48 66,479 2014 118,991 114,899 113,847 114,984 115,838 115,234 115,409 115,708 115,572 103 18,506 2015 179,255 197,744 203,792 205,164 206,011 205,437 204,961 204,944 526 26,130 2016 237,207 242,611 250,990 250,235 250,067 250,482 249,315 1,482 27,633 2017 189,163 195,240 192,749 194,618 195,602 211,386 15,657 73,350 2018 199,565 193,672 192,474 198,064 207,569 4,155 34,481 2019 258,876 231,545 230,691 237,250 8,878 26,362 2020 370,058 362,108 372,212 25,904 39,812 2021 388,949 357,677 43,281 33,015 2022 447,827 172,917 38,117 Total $ 2,573,293 $ 272,951 Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance Unaudited Accident year 2013 & 2014 2015 2016 2017 2018 2019 2020 2021 2022 2013 & prior $ 137,094 $ 153,466 $ 159,682 $ 162,009 $ 164,448 $ 166,456 $ 167,666 $ 168,924 $ 169,084 $ 169,452 2014 68,732 95,076 101,456 108,509 112,518 113,609 113,975 114,898 115,179 2015 103,918 162,654 181,672 192,967 197,524 199,600 201,495 202,848 2016 132,679 211,512 233,540 238,868 241,875 244,820 246,826 2017 103,148 169,743 178,622 184,313 188,928 194,079 2018 84,552 152,592 170,301 187,386 199,007 2019 124,664 185,667 207,714 222,246 2020 210,548 311,539 336,574 2021 213,830 300,731 2022 226,505 Total $ 2,213,447 Reconciliation of Reserve Balances to Liability for Unpaid Loss and Loss Adjustment Expenses Unpaid Loss and Allocated Loss Adjustment Expense, Net of Reinsurance $ 359,846 Reinsurance recoverable on unpaid losses 759,681 Unpaid Unallocated Loss Adjustment Expense 12,280 Unpaid losses and loss adjustment expenses $ 1,131,807 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance as of December 31, 2022 (Unaudited) Year - 1 Year - 2 Year - 3 Year - 4 Year - 5 Thereafter Percentage 55 % 29 % 7 % 4 % 2 % 3 % |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 14. Long-Term Debt Convertible Senior Notes In August 2017 and September 2017, the C ompany issued in aggregate $ 136.8 million of 5.875 % Convertible Senior Notes (“Convertible Notes”) maturing on August 1, 2037 , unless earlier repurchased, redeemed or converted. Interest is payable semi-annually in arrears, on February 1, and August 1 of each year. Holders of the Convertible Notes had an optional put right, pursuant to the indenture governing the Convertible Notes, to require the Company to repurchase the aggregate principal amount of Convertible Notes that are validly tendered. The Company received notice from the Depositary for the Convertible Notes that, on July 29, 2022, $ 10.9 million aggregate principal amount of the Convertible Notes has been validly tendered in accordance with the terms of the indenture and the Company’s notice with respect to the optional put right of the Convertible Notes, and the Company directed the trustee to cancel the Convertible Notes tendered. Prior to this transaction, the outstanding balance as of July 31, 2022 of non-affiliated Convertible Notes was $ 11.8 million. On August 1, 2022, the Company made payments for the principal amount of the Convertible Notes tendered and unpaid interest in the aggregate amounts of $ 10.9 million and $ 320,041 , respectively. The Company used $ 10.0 million from its revolving credit facility to replenish the cash used to pay the $ 10.9 million for the purchase of the tendered Convertible Notes. In January 2022, the Company reacquired and retired $ 11.7 million of its outstanding Convertible Notes. Payment was made in cash and the Convertible Notes were retired a t the time of repurchase. In addition, the Company expensed $ 242,700 which represents the proportionate amount of the unamortized issuance and debt discount costs associated with this repurchase. As of December 31, 2022, the Company had approximately $ 885,000 of the Convertible Notes outstanding, net of $ 21.1 million of Convertible Notes held by an insurance company subsidiary. For the year ended December 31, 2022, the Company made interest payments, net of affiliated Convertible Notes of approximately $ 1.4 million, on the outstanding Convertible Notes. As of December 31, 2021, the Company had $ 22.9 m illion of the Convertible Notes outstanding, net of issuance and debt discount costs in aggregate of approximately $ 506,000 and net of $ 21.1 million of Convertible Notes held by an insurance company subsidiary. For the year ended December 31, 2021, the Company made interest payments, net of affiliated Convertible Notes of approximately $ 1.4 million, on the outstanding Convertible Notes. At December 31, 2020, the Company had $ 22.1 million of the Convertible Notes outstanding, net of issuance and debt discount costs in aggregate of approximately $ 1.3 million and net of $ 21.1 million of Convertible Notes held by an insurance company subsidiary. For the year ended December 31, 2020, the Company made interest payments, net of affiliated Convertible Notes of approximately $ 1.4 million, on the outstanding Convertible Notes. Mortgage Loan In October 2017, the Company and its subsidiary, Skye Lane Properties LLC, jointly obtained a commercial real estate mortgage loan in the amount of $ 12.7 million, bearing interest of 4.95 % per annum and maturing on October 30, 2027 . Pursuant to the terms of the mortgage loan, on October 30, 2022, the interest rate adjusted to an interest rate equal to the annualized interest rate of the United States 5-year Treasury Notes as reported by Federal Reserve on a weekly average basis plus 3.10 %, which resulted in an increase of the rate from 4.95 % to 7.42 % per annum. The Company makes monthly principal and interest payments against the loan. For each of the respective years ended December 31, 2022 and 2021, the Company made principal and interest payments of $ 892,850 on the mortgage loan, respectively. Senior Secured Credit Facility The Company is party to a credit agreement dated as of December 14, 2018 (as amended from time to time, the “Credit Agreement”) with a syndicate of lenders. On November 7, 2022, the Company and its subsidiary guarantors entered into an amendment to the Credit Agreement (the “Seventh Amendment”) to, among other things, (1) decrease the Revolving Credit Facility (defined below) commitments from $ 75 million to $ 50 million, (2) establish a new $ 25 million Term Loan Facility (defined below) to refinance loans outstanding under the existing Revolving Credit Facility and to pay fees, costs and expenses related thereto, (3) reduce, from $ 50 million to $ 25 million, the aggregate amount of potential future increases to the Revolving Credit Facility commitments and/or Term Loan Facility commitments, (4) modify the amortization of the existing term loan facility and new term loan facility to 10 % per annum, paid quarterly, and (5) increase the applicable margin for loans under the Credit Agreement to a range from 2.75 % to 3.25 % per annum for SOFR loans (plus a 0.10 % credit adjustment spread) and based on a leverage ratio (an increase from the prior range of 2.50 % to 3.00 %). The Seventh Amendment also modified certain financial covenants in the Credit Agreement which may limit the Company’s flexibility in connection with future financing transactions and in the allocation of capital in the future, including the Company’s ability to pay dividends and make stock repurchases, and contribute capital to its insurance subsidiaries that are not parties to the Credit Agreement. Specifically, starting in the first quarter of 2023, the Seventh Amendment amended certain financial covenants as follows: (1) require additional leverage ratios under the Consolidated Leverage Ratio covenant (as defined in the Credit Agreement) after the initial step down to 2.50 x in the second quarter of 2023 not to exceed 2.25 x as of the second quarter of 2024 and 2.00 x as of the second quarter of 2025 , (2) apply all (A) Restricted Payments (as defined in the Credit Agreement) and (B) fee forgiveness & other capital contributions to the Company’s regulated insurance companies that are not a party to the Credit Agreement that exceed $ 38 million, when calculating (i) Consolidated Tangible Net Worth (as defined in the Credit Agreement) which is required to be not less than $ 100 million plus 50% of positive quarterly net income (including its subsidiaries and regulated subsidiaries) plus the net cash proceeds of any equity transactions and (ii) Consolidated Fixed Charge Ratio (as defined in the Credit Agreement) which is required to be 1.20 x . The Seventh Amendment also (A) eliminated the current $ 10 million basket available to the Company to pay dividends to its shareholders or to repurchase its securities, (B) provides for a dividend of up to $ 2 million in the fourth quarter of 2024 under certain conditions and (C) restricts future dividends based on maintenance of certain financial ratios, including Consolidated Tangible Net Worth. As a result, going forward, dividends and stock repurchases may be limited or restricted entirely and the Company’s ability to contribute capital to its insurance subsidiaries that are not parties to the Credit Agreement may be limited. The Credit Agreement, as amended, provides for (1) a five-year senior secured term loan facility in an aggregate principal amount of $ 100 million (the “Term Loan Facility”) and (2) a five-year senior secured revolving credit facility in an aggregate principal amount of $ 50 million (inclusive of a sublimit for the issuance of letters of credit equal to the unused amount of the revolving credit facility and a sublimit for swingline loans equal to the lesser of $ 25 million and the unused amount of the revolving credit facility) (the “Revolving Credit Facility” and together with the Term Loan Facility, the “Credit Facilities”). Term Loan Facility. As amended by the Seventh Amendment, the principal amount of the Term Loan Facility amortizes in quarterly installments, which began with the close of the fiscal quarter ending March 31, 2019, in an amount equal to $ 1.9 million per quarter, payable quarterly, decreasing to $ 875,000 per quarter commencing with the quarter ending December 31, 2021, and increasing to $ 2.4 million per quarter commencing with the quarter ending December 31, 2022, with the remaining balance payable at maturity. The Term Loan Facility matures on July 28, 2026 . As of December 31, 2022, there was $ 89.1 million in aggregate principal outstanding under the Term Loan Facility and as of December 31, 2022, after giving effect to the additional term loan advance that was used to refinance amounts outstanding under the Revolving Credit Facility and to pay fees, costs and expenses related thereto, there was $ 10.0 million in aggregate principal outstanding under the Revolving Credit Facility. For the year ended December 31, 2022, the Company made principal and interest payments of approximately $ 5.0 million and $ 2.3 million, respectively and for the comparable year of 2021, the Company made principal and interest payments of approximately $ 4.7 million and $ 2.0 million on the Term Loan Facility, respectively. Revolving Credit Facility. The Revolving Credit Facility allows for borrowings of up to $ 50 million inclusive of a sublimit for the issuance of letters of credit equal to the unused amount of the Revolving Credit Facility and a sublimit for swingline loans equal to the lesser of $ 25 million and the unused amount of the Revolving Credit Facility. As of December 31, 2022, we had $ 10.0 million in borrowings and a $ 31.8 million letters of credit outstanding under the Revolving Credit Facility. In connection with the incurrence of additional amounts under the Term Loan Facility pursuant to the Seventh Amendment, the borrowings under the Revolving Credit Facility were repaid in full. On December 23, 2022, the Company drew $ 10 million from the amended Revolving Credit Facility, resulting in an outstanding principal balance under the Revolving Credit Facility in the amount of $ 10 million. At December 31, 2022, the Company had $ 32.6 million letters of credit outstanding under the Revolving Credit Facility. At January 31, 2023 , $ 22.6 million letters of credit were terminated and there remained a letter of credit in the amount of $ 10 million. At our option, borrowings under the Credit Facilities bear interest at rates equal to either (1) a rate determined by reference to SOFR, plus an applicable margin and a credit adjustment spread equal to 0.10 % or (2) a base rate determined by reference to the highest of (a) the “prime rate” of Regions Bank, (b) the federal funds rate plus 0.50 %, and (c) the adjusted term SOFR in effect on such day for an interest period of one month plus 1.00 %, plus an applicable margin. The Credit Agreement contains, among other things, covenants, representations and warranties and events of default customary for facilities of this type. The Company is required to maintain, as of each fiscal quarter (1) a maximum consolidated leverage ratio of 2.50 to 1.00, stepping down to 2.25 to 1.00 as of the second quarter of 2024 and 2.00 to 1.00 as of the second quarter of 2025, (2) a minimum consolidated fixed charge coverage ratio of 1.20 to 1.00 and (3) a minimum consolidated net worth for the Company and its subsidiaries, which is required to be not less than $100 million plus 50% of positive quarterly net income (including its subsidiaries and regulated subsidiaries) plus the net cash proceeds of any equity transactions. Events of default include, among other events, (i) nonpayment of principal, interest, fees or other amounts; (ii) failure to perform or observe certain covenants set forth in the Credit Agreement; (iii) breach of any representation or warranty; (iv) cross-default to other indebtedness; (v) bankruptcy and insolvency defaults; (vi) monetary judgment defaults and material nonmonetary judgment defaults; (vii) customary ERISA defaults; (viii) a change of control of the Company; and (ix) failure to maintain specified catastrophe retentions in each of the Company’s regulated insurance subsidiaries. In addition to paying interest on outstanding borrowings under the Revolving Credit Facility, we are required to pay a quarterly commitment fee based on the unused portion of the Revolving Credit Facility, which is determined by our consolidated leverage ratio. At December 31, 2022, the effective interest rate on for the Term Loan Facility and Revolving Credit Facility was 7.317 % and 7.423 %, respectively. The Company monitors the rates prior to the reset date which allows it to establish if the payment is monthly or quarterly payment based on the most beneficial rate use d to calculate the interest payment. FHLB Loan Agreements In December 2018, a subsidiary of the Company received a fixed interest rate 3.094 % cash loan of $ 19.2 million from the Federal Home Loan Bank (“FHLB”) Atlanta, with a maturity date of December 13, 2023 . In connection with the agreement, the subsidiary became a member of FHLB. Membership in the FHLB required an investment in FHLB’s common stock which was purchased in December 2018 and valued at $ 1.4 million. Additionally, the transaction required securities be pledged as collateral. As of December 31, 2022, the fair value of the collateralized securities was $ 24.2 million and the equity investment in FHLB common stock was valued at $ 1.5 million. As of December 31, 2022 and 2021, the Company made quarterly interest payments of approximately $ 601,000 and $ 604,000 per the terms of the agreement, respectively. As of December 31, 2022, and December 31, 2021, the Company also holds other common stock from FHLB Des Moines, and FHLB Boston carried at $ 319,100 and $ 215,900 , respectively. The following table summarizes the Company’s long-term debt: December 31, 2022 December 31, 2021 (in thousands) Convertible debt $ 885 $ 23,413 Mortgage loan 11,199 11,521 Credit loan facility 89,125 69,125 Revolving credit facility 10,000 — FHLB loan agreement 19,200 19,200 Total principal amount $ 130,409 $ 123,259 Deferred finance costs $ 1,466 $ 2,502 Total long-term debt $ 128,943 $ 120,757 As of the date of this report, we were in compliance with the applicable terms of all our covenants and other requirements under the Credit Agreement, Convertible Notes, cash borrowings and other loans. Our ability to secure future debt financing depend, in part, on our ability to remain in such compliance. The covenants in the Credit Agreement may limit the Company’s flexibility in connection with future financing transactions and in the allocation of capital in the future, including the Company’s ability to pay dividends and make stock repurchases, and contribute capital to its insurance subsidiaries that are not parties to the Credit Agreement. The covenants and other requirements under the revolving agreement represent the most restrictive provisions that we are subject to with respect to our long-term debt. The schedule of principal payments on long-term debt is as follows: December 31, Amount 2023 $ 29,039 2024 9,854 2025 9,874 2026 71,018 2027 414 Thereafter 10,210 Total principal payments $ 130,409 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 15. Income Taxes The following table summarizes the provision for income taxes: For the Year Ended December 31, 2022 2021 2020 (in thousands) Federal: Current $ ( 1,196 ) $ 3,015 $ ( 14,863 ) Deferred ( 9,714 ) ( 5,872 ) 6,859 Benefit for Federal income tax ( 10,910 ) ( 2,857 ) ( 8,004 ) State: Current 592 1,634 1,501 Deferred ( 1,489 ) ( 84 ) ( 610 ) (Benefit)/Provision for State income tax expense ( 897 ) 1,550 891 Benefit for income taxes $ ( 11,807 ) $ ( 1,307 ) $ ( 7,113 ) The income tax (benefit) expense differs from the amounts computed by applying the U.S. federal income tax rate of as indicated below to pretax income as a result of the following (in thousands): For the Year Ended December 31, 2022 2021 2020 Expected income tax expense at federal rate 21.0 % 21.0 % 21.0 % State tax expense 1.0 % ( 1.0 )% 25.9 % Permanent items ( 0.3 )% ( 0.5 )% 16.0 % Goodwill impairment ( 10.6 )% ( 16.7 )% 0.0 % Non-deductible stock compensation ( 0.1 )% ( 0.2 )% 22.4 % Tax exempt interest 0.1 % 0.1 % ( 18.4 )% Executive compensation 162(m) ( 0.2 )% ( 0.2 )% 20.3 % Political contributions 0.0 % ( 0.2 )% 6.2 % Tax rate change 0.0 % ( 0.5 )% ( 409.1 )% Valuation allowance ( 3.8 )% 0.0 % 0.0 % Other 0.0 % 0.0 % ( 5.6 )% Reported income tax expense 7.11 % 1.7 % ( 321.3 )% The effective tax rates for 2022 and 2021 were impacted by non-deductible goodwill impairment of $ 92.0 million recognized during the second quarter of 2022 and $ 60.5 million during fourth quarter of 2021. Furthermore, the 2022 effective tax rate was impacted by the recognition of a $ 6.4 million valuation allowance related to a portion of its deferred tax inventory associated with its foreign domiciled captive reinsurer, Osprey Re. The Company may only realize those net deferred tax assets to the extent Osprey Re generates future taxable income. Additionally, the effective tax rates were affected by various permanent tax differences, including disallowed executive compensation deductions which were further limited in 2017 and future years upon the enactment of H.R.1, commonly referred to as the Tax Cuts and Jobs Act (“Tax Act”). The effective tax rate for 2020 benefitted from a tax rate change related to a carryback of a tax net operating loss, which was carried back five years under The Coronavirus Aid, Relief, and Economic Security (CARES) Act. On March 27, 2020, former President Trump signed into law the CARES Act to mitigate the economic impacts of the COVID-19 crisis. The CARES Act amended the law for net operating losses generated in taxable years beginning after December 31, 2017 and before January 1, 2021. Net operating losses generated by a corporation during these taxable years are allowed a five-year carryback period. As the Company had a 2020 tax net operating loss, the Company’s 2020 rate reconciliation reflects the favorable $ 7.1 million tax benefit from carrying back tax losses to years for which the statutory rate was 35%. • Enactment of the Inflation Reduction Act of 2022 The Inflation Reduction Act of 2022 (Tax Act) was enacted on August 16, 2022. Along with other changes, the Tax Act created a new corporate alternative minimum tax (AMT) for certain corporations based on 15 % of adjusted financial statement income for the taxable year. The Company does not meet the requirements to be subject to the AMT for 2023. In addition, the Tax Act imposes a 1 % excise tax on corporate stock repurchases. The effective date of these two provisions was January 1, 2023. The significant components of deferred tax assets and liabilities included in the consolidated balance sheets as of December 31, 2022 and 2021 were as follows: For the Year Ended December 31, 2022 2021 Deferred tax assets: (in thousands) Unearned premiums $ 17,060 $ 15,805 Unearned commission 10,053 9,459 Net operating loss 1,189 1,222 Tax-related discount on loss reserve 4,902 3,872 Stock-based compensation 297 84 Accrued expenses 1,016 1,182 Leases 885 792 Unrealized losses 16,987 1,913 Dual Consolidated loss limitation 9,740 — Other 238 472 Total deferred tax asset 62,367 34,801 Valuation allowance ( 6,376 ) — Adjusted deferred tax asset 55,991 34,801 Deferred tax liabilities: Deferred acquisition costs $ 23,420 $ 21,977 Prepaid expenses 180 177 Property and equipment 2,200 1,504 Note discount 290 187 Basis in purchased investments 28 34 Basis in purchased intangibles 11,178 14,550 Internal revenue code 481(a) — 4,416 Other 1,854 1,382 Total deferred tax liabilities 39,150 44,227 Net deferred tax assets (liabilities) $ 16,841 $ ( 9,426 ) The Company had no capital loss carryforward as of December 31, 2022. In assessing the net carrying amount of deferred tax assets, we consider whether it is more likely than not that we will not realize some portion or all of the deferred tax assets. The ultimate realization of deferred tax assets depends upon the generation of future taxable income during the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. During 2022, the Company recorded a $ 6.4 million valuation allowance related to a portion of its deferred tax inventory related to a portion of its deferred tax inventory associated with its foreign domiciled captive reinsurer, Osprey Re. The Company may only realize those net deferred tax assets to the extent Osprey Re generates future taxable income. As of December 31, 2022, the Company has a gross operating loss carryforward for federal and state income tax purposes of $ 0 and $ 27.4 million, respectively, which will expire between 2040 and 2042. The statute of limitations related to our federal and state income tax returns remains open from our filings for 2019 through 2021. There are currently no tax years under examination. As of December 31, 2022, the Company had no uncertain tax positions or unrecognized tax benefits that, if recognized, would impact the effective income tax rate. Our reinsurance affiliate, Osprey Re, Ltd., which is based in Bermuda, made an irrevocable election under section 953(d) of the U.S. Internal Revenue Code of 1986, as amended, to be treated as a domestic insurance company for U.S. Federal income tax purposes. As a result of this election, our reinsurance subsidiary is subject to United States income tax as if it were a U.S. corporation. As of December 31, 2022, the Comp any had no uncertain tax positions or unrecognized tax benefits that, if recognized, would impact the effective income tax rate. |
Statutory Accounting and Regula
Statutory Accounting and Regulations | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Statutory Accounting and Regulations | Note 16. Statutory Accounting and Regulations State laws and regulations, as well as national regulatory agency requirements, govern the operations of all insurers such as our insurance subsidiaries. The various laws and regulations require that insurers maintain minimum amounts of statutory surplus and risk-based capital; restrict insurers’ ability to pay dividends; restrict the allowable investment types and investment mixes and subject the Company’s insurers to assessments. The Company’s insurance subsidiaries are required to file with state insurance regulatory authorities an “Annual Statement” which report under the statutory-basis of accounting which differs from GAAP, among other items, net income and surplus as regards policyholders, which is called stockholder’s equity under GAAP. Combined results of the Company’s insurance subsidiaries reported statutory-basis net loss of $ 33.3 million a nd $ 38.3 million for the years ended December 31, 2022 and 2021, respectively. The Company’s insurance subsidiaries must maintain capital and surplus ratios or balances as determined by the regulatory authority of the states in which they are domiciled. Heritage P&C is required to maintain statutory-basis capital and surplus equal to the greater of $ 15 million or 10 % of their respective liabilities. Zephyr is required to maintain a deposit of $ 750,000 in a federally insured financial institution. NBIC is required to maintain statutory-basis capital and surplus of $ 3.0 million. The combined statutory surplus for Heritage P&C, NBIC, and Zephyr w as $ 276.3 million at December 31, 2022. The combined statutory-basis surplus for Heritage P&C, NBIC, and Zephyr was $ 302.1 million at December 31, 2021. State laws also require the Company’s insurance subsidiaries to adhere to prescribed premium-to-capital surplus ratios, with which the Company’s insurance affiliates are complying. At December 31, 2022, our insurance subsidiaries met the financial and regulatory requirements of the states in which they do business. The legislatures of the states of domicile of our insurance affiliates have adopted the National Association of Insurance Commissioners (“NAIC”) recommendations with regard to expansion of the regulation of insurers to include non-insurance entity affiliates. Specifically, the law permits the state insurance regulators to examine affiliated entities within an insurance holding company system in order to ascertain the financial condition of the insurer. The law also provides for certain disclosures regarding enterprise risk, which are satisfied by the provision of related information filed with the SEC. The NAIC published risk-based capital guidelines for insurance companies that are designed to assess capital adequacy and to raise the level of protection that statutory-basis surplus provides for policy holders. Most states, including Florida, Hawaii, and Rhode Island, have enacted the NAIC guidelines as statutory requirements, and insurers having less statutory-basis surplus than required will be subject to varying degrees of regulatory action, depending on the level of capital inadequacy. State insurance regulatory authorities could require an insurer to cease operations in the event the insurer fails to maintain the required statutory capital. State laws for Florida, Hawaii, and Rhode Island permit an insurer to pay dividends or make distributions out of that part of statutory surplus derived from net operating profit and net realized capital gains. The applicable laws pertain to the state of domicile of each insurance company affiliate and provide calculations to determine the amount of dividends or distributions that can be made without the prior approval of the insurance regulatory authority and the amount of dividends or distributions that would require prior approval of the insurance regulatory authority. In the state of Florida, a dividend may be taken without regulatory approval if the dividend is equal to or less than the greater of 10 % of the insurer’s surplus or the insurer’s net income. In the state of Rhode Island, a dividend may be taken without regulatory approval if the dividend is equal to or less than the lesser of 10 % of the insurer’s surplus or the insurer’s net income excluding realized capital gains. The state of Hawaii restricts dividends without regulatory approval to the smaller of prior years’ net income or 10 % of prior year’s surplus. Heritage P&C and NBIC have no t paid dividends in any of the last three years. Zephyr paid dividends of $ 4.3 mil lion and $ 6.8 million for the years ended December 31, 2022 and 2021. Statutory risk-based capital requirements may further restrict our insurance subsidiaries ability to pay dividends or make distributions if the amount of the intended dividend or distribution would cause statutory-basis surplus to fall below minimum risk-based capital requirements. State insurance laws limits an insurer’s investment in equity instruments and also restricts investments in medium to low quality debt instruments. The Company’s insurance affiliates were in compliance with all investment restrictions at December 31, 2022 and 2021. Governmental agencies or certain quasi-governmental entities can levy assessments upon the Company in the states in which the Company writes policies. Refer to Note 1 “ Basis of Presentation, Nature of Business and Significant Accounting Policies and Practices” to these consolidated financial statements for further information for a description of how the Company recovers assessments imposed upon it. Governmental agencies or certain quasi-governmental entities can also levy assessments upon policyholders, and the Company collects the amount of the assessments from policyholders as surcharges for the benefit of the assessing agency. There are currently assessments being collected from policyholders and remitted to governmental or quasi-governmental entities. If an assessment becomes levied the Company would multiply the premium written on each policy by these assessment percentages to determine the additional amount that it will collect from the policyholder and remit to the assessing agencies. The Company reported its insurance subsidiaries’ assets, liabilities and results of operations in accordance with GAAP, which varies from statutory-basis accounting principles prescribed or permitted by state laws and regulations, as well as by general industry practices. The Company’s reinsurance subsidiary, Osprey, which was incorporated on April 23, 2013 , is licensed as a Class 3A Insurer under The Bermuda Insurance Act 1978 and related regulations. Osprey is required to meet and maintain certain minimum levels of solvency and liquidity. Each year Osprey is required to file with the Bermuda Monetary Authority (the “Authority”) a Capital and Solvency Return, Statutory Financial Return and Audited Financial Statements within four months of its relevant financial year end. Osprey maintains sufficient collateral to comply with regulatory requirements as of December 31, 2022. Bermuda’s standard for financial statement reporting is U.S. GAAP. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 17. Commitments and Contingencies The Company is involved in claims-related legal actions arising in the ordinary course of business. The Company accrues amounts resulting from claims-related legal actions in unpaid losses and loss adjustment expenses during the period that it determines an unfavorable outcome becomes probable and it can estimate the amounts. Management makes revisions to its estimates based on its analysis of subsequent information that the Company receives regarding various factors, including: (i) per claim information; (ii) company and industry historical loss experience; (iii) judicial decisions and legal developments in the awarding of damages; and (iv) trends in general economic conditions, including the effects of inflation. |
Accounts Payable and Other Liab
Accounts Payable and Other Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Accounts Payable and Other Liabilities | Note 18. Accounts Payable and Other Liabilities Other liabilities consist of the following as of December 31, 2022 and 2021: Description December 31, 2022 December 31, 2021 (in thousands) Deferred ceding commission 42,758 $ 40,406 Accounts payable and other payables 17,660 10,086 Accrued dividends 72 1,634 Accrued interest and issuance costs 733 735 Other liabilities 229 195 Premium tax 1,001 871 Commission payables 17,558 17,598 Total other liabilities $ 80,010 $ 71,525 |
Accrued Bonus Compensation
Accrued Bonus Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Compensation Related Costs [Abstract] | |
Accrued Bonus Compensation | Note 19. Accrued Bonus Compensation For the year ended December 31, 2022, the Company recognized bonus expense of $ 2.1 million, of which $ 2.0 million remains unpaid. For the year ended December 31, 2021, the Company recognized employee bonus compensation expense in aggregate of $ 3.4 million, of which $ 3.0 million was unpaid until 2022. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 20. Related Party Transactions In July 2020, the Board of Directors appointed Mark Berset to the Board of Directors of the Company. Mr. Berset is also the Chief Executive Officer of Comegys Insurance Agency, Inc. (“Comegys”), an independent insurance agency that writes policies for Company. The Company pays commission to Comegys based upon standard industry rates consistent with those provided to the Company’s other insurance agencies. There are no arrangements or understandings between Mr. Berset and any other persons with respect to his appointment as a director. For the years ended December 31, 2022, 2021 and 2020, the Company paid agency commission to Comegys of approximately $ 572,600 , $ 843,180 and $ 1.0 million, respectively. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Note 21. Employee Benefit Plan . The Company provides a 401(k) plan for substantially all employees. The Company provides a matching contribution of 100 % on the first 3% of employees’ contribution and 50 % on the next 2% of the employees’ contribution to the plan. The maximum match is 4 %. For the years ended December 31, 2022, 2021 and 2020, the contributions made to the plan on behalf of the participating employees were approximately $ 1.3 million, $ 1.3 million and $ 1.2 million, respectively. Effective September 1, 2021, the Company terminated its self-insured healthcare plan and enrolled in a flex healthcare plan which allows employees the choice of three medical plans with a range of coverage levels and costs. For the years ended December 31, 2022, 2021 and 2020, the Company incurred medical costs of $ 4.9 million, $ 3.5 million and $ 4.1 million, respectively. As of December 31, 2022 and 2021, the Company had $ 221,386 and $ 422,800 of liability from the Company’s legacy self-insured healthcare plan. The current healthcare plan is fully insured. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Equity | Note 22. Equity The total amount of authorized capital stock consists of 50,000,000 shares of common stock and 5,000,000 shares of preferred stock. As of December 31, 2022, the Company had 25,539,433 shares of common stock outstanding, 12,231,674 treasury shares of common stock and 648,493 shares of unvested shares of restricted common stock issued reflecting total paid-in capital of $ 334.7 million as of such date. Common Stock Holders of common stock are entitled to one vote for each share held on all matters subject to a vote of stockholders, subject to the rights of holders of any outstanding preferred stock. Accordingly, holders of a majority of the shares of common stock entitled to vote in any election of directors may elect all of the directors standing for election, subject to the rights of holders of any outstanding preferred stock. Holders of common stock will be entitled to receive ratably any dividends that the board of directors may declare out of funds legally available therefor, subject to any preferential dividend rights of outstanding preferred stock. Upon the Company’s liquidation, dissolution or winding up, the holders of common stock will be entitled to receive ratably its net assets available after the payment of all debts and other liabilities and subject to the prior rights of holders of any outstanding preferred stock. Holders of common stock have no preemptive, subscription, redemption or conversion rights. There is no redemption or sinking fund provisions applicable to the common stock. All outstanding shares of the Company’s capital stock (excluding restricted stock) are fully paid and nonassessable. Stock Repurchase Program On August 1, 2019, the Company announced that its Board of Directors ratified a stock repurchase program authorizing the Company to repurchase up to $ 50.0 million of its common stock which had expired on December 31, 2020 . As of December 31, 2020, the Company repurchased in aggregate 2,065,042 shares of its common stock since authorizing the stock repurchase program for $ 26.2 million. On November 2, 2020, the Board of Directors extended the Company’s existing share repurchase program from December 31, 2020 to December 31, 2021 and increased the authorization under the program from the $ 23.8 million remaining to $ 50.0 million, which repurchases may be made under the Company’s current Rule 10b5-1 trading plan, which allows the Company to purchase shares below a predetermined price per share, or otherwise. As of December 31, 2021, the Company repurchased in aggregate 1,256,898 shares of its common stock under its repurchase program for $ 8.2 million. The stock purchase program expired on December 31, 2022 . On December 19, 2021, the Board of Directors established a new share repurchase program plan to commence upon December 31, 2021 , for the purpose of repurchasing up to an aggregate of $ 25.0 million of common stock, through the open market or in such other manner as will comply with the terms of applicable federal and state securities laws and regulations, including without limitation, Rule 10b-18 under the Securities Act at any time or from time to time on or prior to December 31, 2022 . As of December 31, 2022, the Company repurchased in aggregate 1,694,937 shares of its common stock under its repurchase program for $ 7.3 million. The stock purchase program expired on December 31, 2022. On December 15, 2022, the Board of Directors established a new share repurchase program plan to commence upon December 31, 2022 , for the purpose of repurchasing up to an aggregate of $ 10.0 million of common stock, through the open market or in such other manner as will comply with the terms of applicable federal and state securities laws and regulations, including without limitation, Rule 10b-18 under the Securities Act at any time or from time to time on or prior to December 31, 2023 (the "New Share Repurchase Plan"). Dividends On March 4, 2022, the Company announced that its Board of Directors declared a $ 0.06 per share quarterly dividend payable on April 6, 2022 to stockholders of record as of March 17, 2022 . On May 5, 2022 , the Company announced that its Board of Directors declared a $ 0.06 per share quarterly dividend payable on July 5, 2022 to stockholders of record as of June 14, 2022 . On August 3, 2022 , the Board of Directors elected to allocate the $ 0.06 per share typically used to pay a quarterly dividend to shareholders to repurchase common stock totaling $ 1.7 million. The Board of Directors re-evaluates dividend distribution on a quarterly basis and will make a determination, in part, based on the current stock trading price as compared to book value. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Note 23. Stock-Based Compensation Restricted Stock The Company has adopted the Heritage Insurance Holdings, Inc., Omnibus Incentive Plan (the “Plan”) effective on May 22, 2014. The Plan authorized 2,981,737 shares of common stock for issuance under the Plan for future grants. At December 31, 2022, there were 386,603 shares available for grant under the Plan. The Company recognizes compensation expense under ASC 718 for its stock-based payments based on the fair value of the awards. The Company has granted shares of its common stock subject to certain restrictions under the Plan. Restricted stock awards granted to employee’s vest in equal installments generally over a three to five year period from the grant date subject to the recipient’s continued employment. The fair value of restricted stock awards is estimated by the market price at the date of grant and amortized on a straight-line basis to expense over the period of vesting. Recipients of restricted stock awards granted prior to 2021 have the right to receive dividends; dividends accrue but are not paid until vesting for recipients of restricted stock awards granted 2021 and thereafter. Effective January 1, 2022, the Board of Directors approved the recommendations made by the Compensation Committee to revise the non-employee director compensation policy to provide that: (i) each non‐employee director of the Company is entitled to an annual cash fee of $ 125,000 , payable quarterly; (ii) each member of a committee of the Board is entitled to an additional annual cash fee of $ 2,500 ; (iii) each chair of a committee of the Board is entitled to an additional $ 5,000 annual cash fee; (iv) the chair of the Board, to the extent the chair is a non‐employee director, is entitled to an additional annual cash fee of $ 20,000 ; and (v) each non‐employee director of the Company is granted annually a number of shares of restricted stock with a value equal to $ 40,000 at the date of issuance, a grant date of the date of the annual meeting of stockholders of the Company and which restricted stock will vest on the earlier of the one‐year anniversary of the date of issuance and the day immediately prior to the date of the following year’s annual meeting of stockholders of the Company. During the first quarter of 2022, the Company awarded 3,636 shares and 115,327 shares of time-based restricted stock with at the time of grant a fair value of $ 5.50 and $ 6.72 per share, respectively to certain employees. The time-based restricted stock will vest in two and three year equal installments on December 27, 2022, 2023 and 2024, respectively. In addition, during the first quarter of 2022, the Company awarded 10,909 shares and 245,536 shares of performance-based restricted stock with at the time grant a fair value of $ 5.50 and $ 6.72 per share, respectively. The performance-based restricted stock has a three-year performance period beginning on January 1, 2022 and ending on December 31, 2024 and will vest following the end of the performance period but no later than March 5, 2025. In January 2022, the Company awarded to non-employee directors in aggregate 21,768 shares of restricted stock with a fair value at the time of grant of $ 5.88 per share which were to vest on the date of the next annual meeting of the Company's stockholders that occurs after the award date, provided the member remains on the Board until such date. The Company's annual shareholders meeting was held on June 23, 2022, at which time the restricted stock was effectively vested. In June 2022, the Company awarded to non-employee directors in aggregate 99,376 shares of restricted stock with a fair value at the time of grant of $ 3.22 per share. The awards will vest on the earlier of the one year anniversary of the grant date and the date immediately prior to the date of the next annual meeting of the Company's stockholders that occurs after the award date, provided the member remains on the Board until such date. For the performance-based restricted stock the numbers of shares that will be earned at the end of the performance period is subject to decrease based on the results of the performance condition. The Plan authorizes the Company to grant stock options at exercise prices equal to the fair market value of the Company’s stock on the dates the options are granted. The Company has not granted any stock options since 2015 and all unexercised stock options have since been forfeited. Restricted stock activity for the three years ended December 31, 2022, 2021 and 2020 is as follows: Weighted-Average Grant-Date Fair Number of shares Value per Share Non-vested, at December 31, 2019 345,534 $ 19.56 Granted 15,000 10.68 Vested ( 13,044 ) 13.17 Canceled and surrendered ( 247,223 ) 9.49 Non-vested, at December 31, 2020 100,267 $ 15.37 Granted - Performance-based restricted stock 174,689 9.45 Granted - Time-based restricted stock 80,104 9.68 Vested ( 43,711 ) 9.61 Canceled and surrendered ( 28,257 ) 10.69 Non-vested, at December 31, 2021 283,092 $ 9.32 Granted - Performance-based restricted stock 256,445 6.67 Granted - Time-based restricted stock 240,107 5.18 Vested ( 90,458 ) 4.81 Canceled and surrendered ( 40,693 ) 4.40 Non-vested, at December 31, 2022 648,493 $ 7.38 Awards are being amortized to expense over a one to five year vesting period. The Company recognized $ 2.0 million, $ 1.2 million and $ 4.7 million of compensation expense for the years ended December 31, 2022, 2021 and 2020, respectively. During the year ended December 31, 2022, the Company granted in aggregate 484,130 , net of 12,422 canceled shares of time-based and performance-based restricted stock. During the year ended December 31, 2022, 96,961 shares of restricted stock were vested and released. Of the stock released to employees, 28,271 shares were withheld to cover withholding taxes of $ 94,000 . During the year ended December 31, 2021, the Company granted in aggregate 254,793 shares of time-based and performance-based restricted stock. During the year ended December 31, 2021, 71,968 shares of restricted stock were vested and released. Of the stock released to employees, 28,257 shares were withheld to cover withholding taxes of $ 231,000 . During the year ended December 31, 2020, 260,267 shares of restricted stock were vested and released. Of the stock released to employees, 247,223 shares were withheld by the Company to cover withholding taxes of $ 2.4 million. At December 31, 2022, there was approximately $ 926,640 unrecognized expense related to time-based unvested restricted stock and an additional $ 1.1 million for performance-based restricted stock, which is expected to be recognized over the remaining restriction periods as described in the table below. For the comparable period in 2021, there was $ 2.0 million of unrecognized expense. Additional information regarding the Company’s outstanding non-vested time-based restricted stock and performance-based restricted stock at December 31, 2022 is as follows: Grant date Restricted shares unvested Share Value at Grant Date Per Share Remaining Restriction Period (Years) February 12, 2018 25,000 16.35 0.0 January 4, 2021 111,857 10.43 1.2 April 13, 2021 32,681 10.71 1.2 October 18, 2021 56,853 6.89 1.2 March 3, 2022 12,727 5.50 2.2 March 16, 2022 322,421 6.72 2.2 June 23, 2022 86,954 3.22 0.5 648,493 |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2022 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (unaudited) | Note 24. Selected Quarterly Financial Data (unaudited) The following table provides a summary of unaudited quarterly results for the periods presented (in thousands, except per share data): For the year ended December 31, 2022 First Quarter Second Quarter Third Quarter Fourth Quarter Net premiums earned $ 152,929 $ 158,271 $ 159,693 $ 166,171 Investment income $ 2,000 $ 2,163 $ 2,887 $ 4,927 Total revenues $ 158,608 $ 163,770 $ 165,493 $ 174,589 Total operating expenses (1) $ 198,019 $ 249,322 $ 212,801 $ 159,679 Operating (loss) income $ ( 39,411 ) $ ( 85,552 ) $ ( 47,308 ) $ 14,908 Net (loss) income $ ( 30,759 ) $ ( 87,866 ) $ ( 48,240 ) $ 12,501 Basic net (loss) income per share $ ( 1.15 ) $ ( 3.32 ) $ ( 1.83 ) $ 0.49 Diluted net (loss) income per share $ ( 1.15 ) $ ( 3.32 ) $ ( 1.83 ) $ 0.48 For the year ended December 31, 2021 First Quarter Second Quarter Third Quarter Fourth Quarter Net premiums earned $ 142,199 $ 146,499 $ 162,445 $ 159,928 Investment income $ 1,293 $ 956 $ 1,548 $ 1,855 Total revenues $ 147,243 $ 150,197 $ 167,408 $ 166,712 Total operating expenses (1) $ 153,075 $ 154,187 $ 182,785 $ 209,578 Operating (loss) income $ ( 5,832 ) $ ( 3,990 ) $ ( 15,377 ) $ ( 42,865 ) Net (loss) income $ ( 5,148 ) $ ( 3,950 ) $ ( 16,410 ) $ ( 49,218 ) Basic net (loss) income per share $ ( 0.19 ) $ ( 0.14 ) $ ( 0.59 ) $ ( 1.79 ) Diluted net (loss) income per share $ ( 0.19 ) $ ( 0.14 ) $ ( 0.59 ) $ ( 1.79 ) The sum of quarterly amounts, including per share amounts, may not equal amounts reported for year-to-date periods. This is due to the effects of rounding and changes in the number of weighted-average shares outstanding for each period. (1) The second quarter of 2022 and the fourth quarter of 2021 results include a $ 92.0 million and $ 60.5 million impairment of goodwill, respectively. Refer to Note 3 “ Goodwill and Other Intangible Assets ” to these consolidated financial statements for further information on our 2022 and 2021 goodwill impairment charge. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 25. Subsequent Events The Company performed an evaluation of subsequent events through the date the condensed consolidated 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 December 31, 2022. |
Schedule II - Condensed Financi
Schedule II - Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Condensed Financial Information of Registrant | SCHEDULE II – CONDENSED FINAN CIAL INFORMATION OF REGISTRANT Condensed Balance Sheet The following summarizes the major categorizes of Heritage Insurance Holdings, Inc.’s financial statements (in thousands): As of December 31, 2022 2021 (in thousands) ASSETS Cash and cash equivalents $ 1,109 $ 6,404 Investment in and advances to subsidiaries 269,325 484,096 Other assets 7,207 4,728 Total Assets $ 277,641 $ 495,228 LIABILITIES Other liabilities $ 146,602 $ 152,177 Total Liabilities $ 146,602 $ 152,177 STOCKHOLDERS' EQUITY Common stock $ 3 $ 3 Paid-in-capital 334,711 332,797 Treasury ( 130,900 ) ( 123,557 ) Accumulated other comprehensive income ( 53,585 ) ( 4,573 ) Retained earnings ( 19,190 ) 138,381 Total Stockholders' Equity $ 131,039 $ 343,051 Total Liabilities and Stockholders' Equity $ 277,641 $ 495,228 Condensed Statement of Operations For the Years Ended December 31, 2022 2021 2020 (In thousands, except share and per share amounts) Revenue: Other revenue $ 589 $ 1,511 $ 5,717 Total revenue 589 1,511 5,717 Expenses: General and administrative expense 6,671 10,498 13,021 Amortization of debt issuance cost 1,449 2,500 2,128 Interest expense, net 7,471 5,895 7,769 Total expenses $ 15,591 $ 18,893 $ 22,918 Loss before income taxes and equity in net income of subsidiaries ( 15,002 ) ( 17,382 ) ( 17,201 ) Benefit from income taxes ( 3,147 ) ( 3,526 ) ( 3,425 ) Loss before equity in net income of subsidiaries ( 11,855 ) ( 13,856 ) ( 13,776 ) Equity in net income of subsidiaries ( 142,508 ) ( 60,871 ) 23,102 Consolidated net (loss) income $ ( 154,363 ) $ ( 74,727 ) $ 9,326 See notes to condensed financial statements. SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT Condensed Statement of Cash Flows For the Years Ended December 31, Cash flows from operating activities: 2022 2021 2020 (in thousands) Net loss $ ( 11,854 ) $ ( 13,856 ) $ ( 13,776 ) Adjustments to reconcile net loss to net cash provided by (used in) operating Stock-based compensation 2,008 1,161 4,683 Net realized gains — — — Amortization of debt issuance cost 1,448 1,657 — Impairment on other investments — 1,157 — Deferred income taxes 474 ( 69 ) ( 343 ) Changes in operating assets and liabilities Prepaid 8 1,160 317 Income taxes payable ( 14,674 ) 10,764 ( 8,585 ) Accrued interest on debt — 306 400 Other assets 332 ( 2,100 ) ( 2,448 ) Dividends payable ( 1,562 ) ( 36 ) ( 80 ) Other liabilities 170 ( 416 ) 460 Net cash used in operating activities $ ( 23,651 ) $ ( 271 ) $ ( 19,372 ) Investing Activities: Dividends received from subsidiaries 32,200 41,138 47,256 Investments and advances to subsidiaries ( 8,948 ) ( 22,189 ) ( 5,872 ) Net cash provided by investing activities 23,252 18,949 41,385 Financing Activities: Mortgage loan payments ( 322 ) ( 613 ) ( 290 ) Draw from credit facility 35,000 — — Repurchase of convertible notes ( 22,529 ) — — Repayment of long-term debt ( 6,400 ) ( 2,430 ) ( 9,375 ) Shares tendered for income tax withholdings ( 94 ) ( 231 ) ( 2,384 ) Purchase of treasury stock ( 7,343 ) ( 8,192 ) ( 9,997 ) Dividends paid ( 3,208 ) ( 6,673 ) ( 6,772 ) Net cash used in financing activities ( 4,896 ) ( 18,139 ) ( 28,818 ) (Decrease) increase in cash and cash equivalents ( 5,295 ) 539 ( 6,806 ) Cash and cash equivalents, beginning of period 6,404 5,865 12,671 Cash and cash equivalents, end of year $ 1,109 $ 6,404 $ 5,865 See notes to condensed financial statements. SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT Notes to Condensed Financial Statements (1) Organization and Basis of Presentation Heritage Insurance Holdings, Inc., (“we”, “our”, “us” and “Heritage”), established in 2012 and incorporated in the state of Delaware in 2014, is a property and casualty insurance holding company that provides personal and commercial residential property insurance. We are headquartered in Tampa, Florida and, through our insurance company subsidiaries, Heritage Property & Casualty Insurance Company (“Heritage P&C”), Narragansett Bay Insurance Company (“NBIC”) and Zephyr Insurance Company (“Zephyr”), we write personal residential property insurance for single-family homeowners and condominium owners, and rental property insurance in the states of Alabama, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Rhode Island, South Carolina, and Virginia. We also provide commercial residential insurance for properties in Florida, New Jersey, and New York and are also licensed in the state of Pennsylvania. In order to limit our potential exposure to catastrophic events, we purchase significant reinsurance from third party reinsurers and may sponsor catastrophe bonds issued by Citrus Re Ltd. The accompanying condensed financial statements included the activity of Heritage and the equity basis of its consolidated subsidiaries. Accordingly, these condensed financial statements have been presented for the parent company only. These condensed financial statements should be read in conjunction with the consolidated financial statements and related notes of Heritage Insurance and subsidiaries set forth in Part II, Item 8 Financial Statements and Supplemental Data of this Annual Report. In applying the equity method to our consolidated subsidiaries, we record the investment at cost and subsequently adjust for additional capital contributions, distributions and proportionate share of earnings or losses. |
Schedule V - Valuation Allowanc
Schedule V - Valuation Allowances and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2022 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Valuation Allowances and Qualifying Accounts | SCHEDULE V – VALUATION ALLOW ANCES AND QUALIFYING ACCOUNTS The following table summarizes activity in the Company’s allowance for doubtful accounts for the year ended December 31, 2022 and 2021. Description Beginning balance Charges in earnings Charges to other accounts Deductions Ending balance (in thousands) Year ended December 31, 2022 Allowance for doubtful accounts $ 451 — — — $ 451 Year ended December 31, 2021 Allowance for doubtful accounts $ 451 — — — $ 451 |
Schedule VI - Supplemental Info
Schedule VI - Supplemental Information Concerning Consolidated Property and Causality Insurance Operations | 12 Months Ended |
Dec. 31, 2022 | |
SEC Schedule, 12-18, Supplemental Information, Property-Casualty Insurance Underwriters [Abstract] | |
Supplemental Information Concerning Consolidated Property and Causality Insurance Operations | SCHEDULE VI – SUPPLEMENTAL INFORMATION CONCERNING CO NSOLIDATED PROPERTY AND CASUALTY INSURANCE OPERATIONS The following table provides certain information related to the Company’s property and casualty operations as of, and for the periods presented (in thousands): As of For the Year Ended December 31, Year Reserves for Incurred Incurred Paid losses Net (in thousands) 2022 $ 1,131,807 $ 497,428 $ 3,734 $ 417,445 $ 11,977 2021 $ 590,166 $ 430,907 $ ( 3,537 ) $ 400,614 $ 5,652 2020 $ 659,341 $ 392,976 $ ( 19,589 ) $ 331,637 $ 12,302 As of For the Year Ended December 31, Year Deferred Amortization Net Premiums Net Premiums Unearned (in thousands) 2022 $ 99,617 $ 197,057 $ 662,168 $ 637,065 $ 656,641 2021 $ 93,881 $ 188,490 $ 611,732 $ 611,071 $ 590,419 2020 $ 89,265 $ 159,220 $ 606,264 $ 544,722 $ 569,618 |
Basis of Presentation, Nature_2
Basis of Presentation, Nature of Business and Significant Accounting Policies and Practices (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Heritage Insurance Holdings, Inc. and its wholly-owned subsidiaries. The accompanying consolidated financial statements include the accounts of the Company and all other entities in which the Company has a controlling financial interest (none of which are variable interest entities). All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with United States Generally Accepted Accounting Principles (“U.S. GAAP”) requires us to make estimates and assumptions about future events that affect the amounts reported in our consolidated financial statements and accompanying notes. We evaluate our estimates on an ongoing basis when updated information related to such estimates becomes available. We base our estimates on historical experience and information available to us at the time these estimates are made. Actual results could differ materially from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company’s cash and cash equivalents include demand deposits with financial institutions and short-term, highly-liquid financial instruments with original maturities of three months or less when purchased. The carrying amounts reported in the consolidated balance sheets for interest bearing deposits approximate their fair value because of the short maturity of these financial instruments. To the extent there are negative cash balances with any individual financial institution, the Company excludes the negative amount from cash and cash equivalents neg ative cash balances and reports as accounts payable and other liabilities. |
Restricted Cash | Restricted Cash Restricted cash related to individual state regulatory deposits was $ 6.7 and $ 5.4 million for the years ended December 31, 2022 and 2021, respectively. The Company earned interest income of $ 12,612 and $ 11,918 on its restricted cash deposits. |
Investments | Investments Fixed-Maturity Securities The Company classifies all of its investments in debt securities as available-for-sale and reports them at fair value. Subsequent to its acquisition of debt securities available-for-sale, the Company records changes in value through the date of disposition as unrealized holding gains and losses, net of tax effects, and includes them as a component of other comprehensive income. Refer to Note 2 “Investments” to these consolidated financial statements for further information. Short-term Securities Short-terms securities have an original maturity of less than one year and are carried at amortized cost, which approximates fair value. Accumulated Other Comprehensive Income Accumulated other comprehensive income consists solely of unrealized gains and losses on debt securities available-for-sale, net of tax. Investment Gains and Losses Net realized investment gains and losses are included as a component of pre-tax revenues based upon specific identification of the investments sold on the trade date. Included in net realized and unrealized gains (losses) are credit impairment losses on invested assets other than those investments accounted for using the equity method of accounting described in the “Allowance for Credit Losses” and “Impairment of Other Investments” section discussed below. Allowance for Credit Losses (Available-for-Sale-Debt Securities) The impairment model for available-for-sale (“AFS”) debt securities differs from the current expected credit loss (“CECL”) methodology applied for held to maturity debt securities because AFS debt securities are measured at fair value rather than amortized cost. Although ASC 326 replaced the legacy other-than-temporary impairment (“OTTI”) model with a credit loss model, it retained the fundamental nature of the legacy OTTI model. For AFS debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either criteria is met, the security’s amortized cost basis is written down to fair value through income. For AFS debt securities where neither of the criteria are met, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the credit rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited to the amount that the fair value is less than the amortized cost basis. Under the guidance, an entity may no longer consider the length of time fair value has been less than amortized cost. As of December 31, 2022 and 2021, management evaluated and determined a credit allowance was not significant to the financial statements. Other Investments Non-Consolidating Variable Interest Entities (“VIEs”) The Company makes passive investments in limited partnerships (“LPs”), corporations, and a Real Estate Investment Trust (“REIT”). The Company determines at the inception of each arrangement whether an entity in which it has made an investment or in which it has other variable interests is considered a variable interest entity ("VIE"). The Company consolidates VIEs when it is determined to be the primary beneficiary. The Company is the primary beneficiary of a VIE when it has the power to direct activities that most significantly affect the economic performance of the VIE and has the obligation to absorb the majority of their losses or entitled to benefits. If the Company is not the primary beneficiary in a VIE, it will account for the investment or other variable interests in a VIE in accordance with applicable GAAP. For the year ended December 31, 2022 and 2021, the Company was not the primary beneficiary to any of its other investments and therefore considered the other investments as non-consolidated VIEs. Equity securities that do not result in consolidation and are not accounted for under the equity method, are measured at fair value. Equity securities without a readily determinable fair value are reported at cost, less impairment, unless we identify observable price changes in orderly transactions for the identical or a similar investment of the same issuer (measurement alternative). Changes in fair value are reflected in the Company’s consolidated statements of operations. Certain other investments provide the Company with monthly or quarterly return on capital on a regular schedule. Impairment of Other Investments The Company maintains various interests in other investments without a readily determinable fair value that are evaluated for impairment at each reporting period. When such events or changes occur, the Company evaluates the estimated present value of future cash flows compared to its cost basis in the investment to evaluate whether there may be an impairment. For the year ended December 31, 2022, the Company recorded no impairment charges on its other investments compared to recording an impairment of $ 2.2 million for the year ended December 31, 2021. |
Fair Value | Fair Value Major categories of financial assets and liabilities, including short-term investments, other assets and derivatives are measured at fair value on a recurring basis. Certain assets and liabilities are measured at fair value on a nonrecurring basis when impaired, which include long-lived assets, goodwill, asset retirement obligations and other investments that the Company cannot significantly influence. Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the principal or most advantageous market in which we would transact is analyzed. Assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of non-performance, are considered. The Company estimates the fair value of its investments using the closing prices on the last business day of the reporting period, obtained from active markets such as the NYSE and NASDAQ. For securities for which quoted prices in active markets are unavailable, the Company uses observable inputs such as quoted prices in inactive markets, quoted prices in active markets for similar instruments, benchmark interest rates, broker quotes and other relevant inputs. The Company does not have any investments in its portfolio which require the use of unobservable inputs. The Company’s estimate of fair value reflects the interest rate environment that existed as of the close of business on December 31, 2022. Changes in interest rates after December 31, 2022 may affect the fair value of the Company’s investments. The Company’s non-financial assets, such as goodwill and intangible assets, are carried at cost until there are indicators of impairment and are recorded at fair value only when an impairment charge is recognized. Refer to Note 3 “ Goodwill and Other Intangible Assets ” to these consolidated financial statements for further information on our 2021 and 2022 goodwill impairment charges. At December 31, 2022, all goodwill had been written off. Long term debt is recorded at carrying value, Refer to Note 14 “ Long-Term Debt” to these consolidated financial statements for further information. |
Premiums | Premiums The Company records direct and assumed premiums written as revenue on a daily pro rata basis over the contract period of the related in force policies or reinsurance contract. For any portion of premiums not earned at the end of the reporting period, the Company records an unearned premium liability. Premiums receivable represents amounts due from our policyholders for billed premiums and related policy fees. We perform a policy-level evaluation to determine the extent to which the balance of premiums receivable exceeds the balance of unearned premiums. When we receive payments on amounts previously charged off, we reduce bad debt expense in the period we receive the payment. Balances in premiums receivable and the associated allowance account are removed upon cancellation of the policy due to non-payment. An allowance of $ 451,000 was recorded as of December 31, 2022 and 2021. Bad debt expense related to uncollectible premiums was $ 0 , $ 0 and $ 161,300 for the years ended December 31, 2022, 2021 and 2020, respectively. When the Company receives premium payments from policyholders prior to the effective date of the related policy, the Company records an advance premiums liability. On the policy effective date, the Company reduces the advance premium liability and records the premiums as described above. |
Policy Acquisition Costs | Policy Acquisition Costs The Company incurs policy acquisition costs that vary with, and are directly related to, the production of new business. Policy acquisition costs consist of the following four items: (i) commissions paid to outside agents at the time of policy issuance; (ii) policy administration fees paid to a third-party administrator at the time of policy issuance; (iii) premium taxes; and (iv) inspection fees. The Company capitalizes policy acquisition costs to the extent recoverable, then the Company amortizes those costs over the contract period of the related policy. We earn ceding commission on our quota share reinsurance contracts. Our accounting policy is to allocate ceding commission between policy acquisition costs and general and administrative expenses for financial reporting purposes. Ceding commission is allocated between policy acquisition costs and general and administrative expenses based upon the proportion these costs bear to production of new business. For the years ended December 31, 2022 and 2021, we earned ceding commission income of $ 61.9 million and $ 62.7 million of which $ 46.5 million and $ 47.1 million was allocable to policy acquisition costs. Ceding commission income is deferred and recognized over the quota share contract period. The amount and rate of ceding reinsurance commissions earned on the net quota share contract can slide within a prescribed minimum and maximum, depending on loss performance and how future losses develop. |
Premium Deficiency Reserve | Premium Deficiency Reserve At each reporting date, the Company determines whether it has a premium deficiency. A premium deficiency would result if the sum of the Company’s expected losses, deferred policy acquisition costs, and policy maintenance costs (such as costs to store records and costs incurred to collect premiums and pay commissions) exceeded the Company’s related unearned premiums plus investment income. Should the Company determine that a premium deficiency exists, the Company would write off the unrecoverable portion of deferred policy acquisition cost. |
Reinsurance | Reinsurance The Company follows industry practice of reinsuring a portion of our risks. Reinsurance involves transferring, or “ceding”, all or a portion of the risk exposure on policies the Company writes to another insurer, known as a reinsurer. To the extent that the Company’s reinsurers are unable to meet the obligations they assume under the Company’s reinsurance agreements, the Company remains liable for the entire insured loss. As a result, a reasonable possibility exists that an estimated recovery may change significantly in the near term from the amounts included in the Company’s consolidated financial statements. The Company’s reinsurance agreements are generally short-term, prospective contracts. The Company records an asset, prepaid reinsurance premiums, and a liability, reinsurance payable, for the entire contract amount upon commencement of new reinsurance agreements. The Company amortizes its prepaid reinsurance premiums over the 12-month contract period. When the Company incurs losses recoverable under its reinsurance program, the Company records amounts recoverable from its reinsurers on paid losses plus an estimate of amounts recoverable on unpaid losses. The estimate of amounts recoverable on unpaid losses is a function of the Company’s liability for unpaid losses associated with the reinsured policies; therefore, the amount changes in conjunction with any changes to the estimate of unpaid losses. Given that an estimate of amounts recoverable from reinsurers on unpaid losses may change at any point in the future because of its relation to the Company’s reserves for unpaid losses, a reasonable possibility exists that an estimated recovery may change significantly from initial estimates. The Company remains liable for claims payments if any reinsurer is unable to meet its obligations under the reinsurance agreements. 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 concentration of credit risk arising from similar geographic regions, activities or economics characteristics of the reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. The Company contracts with a diverse population of reinsurers to secure its annual reinsurance coverage, for which the excess of loss treaties generally become effective June 1st each year. Allowance for Credit Losses for Reinsurance Recoverables The allowance for credit losses for reinsurance recoverable is evaluated based on historical loss experience adjusted for current events and reasonable and supportable forecasts from both internal and external sources. The Company monitors the credit quality of its reinsurance recoverables through the use of A.M. Best’s Financial Strength rating ("FSR"), or in the absence of an FSR consideration of credit ratings issued by approved rating agencies such as S&P, Moody’s, or Fitch. At December 31, 2022, the determination of the allowance for credit losses on reinsurance recoverables included analysis of (i) reinsurance recoverable balances by reinsurer FSR, (ii) estimated payment patterns associated with the claims underlying the reinsurance balances and (iii) historical default rates by reinsurer FSR as published by A.M. Best. In addition to the quantitative analysis, qualitative factors considered include but are not limited to (i) global reinsurer capital level, (ii) reinsurance market trends, (iii) the interest rate environment and (iv) the stressed global economy. Reinsurance recoverables are reported on the consolidated balance sheets net of the CECL allowance, if any. |
Long-Lived Assets-Property and Equipment | Long-Lived Assets—Property and Equipment Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation is calculated on a straight-line basis over the estimated useful lives as follows: building— 40 years ; computer hardware and software 3-years ; office and furniture equipment— 3 to 7 years . Leasehold improvements are amortized over the shorter of the lease term or the asset’s useful life. Expenditures for improvements are capitalized to the property accounts. Replacements and maintenance and repairs that do not improve or extend the life of the respective assets are expensed as incurred. |
Capitalized Software | Capitalized Software Costs associated with the implementation of certain internal systems are capitalized and carried at capitalized less accumulated amortization once they are it is placed in service and are included as a component of fixed assets on the Company’s consolidated balance sheet. Costs capitalized include internal personnel costs, external developer costs, and interest. The implementation costs relate to systems built on software which the Company purchased or licensed and developed both internally and with third party vendors. As such, capitalized costs will be amortized over the term of the useful life of the software. |
Leases | Leases We lease office space under finance and operating leases with expiration dates through 2031 . We determine whether an arrangement constitutes a lease and record lease liabilities and right-of-use assets on our consolidated balance sheets at lease commencement. We primarily use our incremental borrowing rates for our operating leases (rates are not readily determinable) and implicit rates for our financing leases in determining the present value of lease payments. We measure right-of-use assets based on the corresponding lease liability adjusted for (i) payments made to the lessor at or before the commencement date, (ii) initial direct costs we incur and (iii) tenant incentives under the lease. We begin recognizing rent expense when the lessor makes the underlying asset available to us, we do not assume renewals or early terminations unless we are reasonably certain to exercise these options at commencement, and we do not allocate consideration between lease and non-lease components. For short-term leases, we record rent expense in our consolidated statements of operations on a straight-line basis over the lease term and record variable lease payments as incurred. |
Goodwill and Intangible Assets | Goodw ill and Intangible Assets On January 1, 2020, the Company adopted ASU 2017-04, Simplifying the Test for Goodwill Impairment (ASC 350) ("ASU 2017-04"), which changed the guidance on goodwill impairment. Under the guidance, the qualitative assessment of the recoverability of goodwill remains the same, but the second step of the two-step quantitative test, which required calculation of the implied fair value of goodwill, has been eliminated. Instead, an impairment charge is recognized when the carrying value of a reporting unit exceeds its fair value. Any excess of carrying value over fair value is written down as an impairment. This evaluation is performed annually, during the fourth quarter or more frequently if facts and circumstances warrant. An impairment loss would be recognized if, and to the extent that, the carrying value of goodwill exceeded the implied value. The remaining balance of goodwill was written off during the second quarter of 2022. The Company reviews amortizable intangible assets for impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. If the Company concludes that impairment exists, the carrying amount is reduced to fair value. Refer to Note 3 “ Goodwill and Other Intangible Assets ” to these consolidated financial statements, for further information on our 2022 goodwill impairment charge. " |
Unpaid Losses and Loss Adjustment Expenses | Unpaid Losses and Loss Adjustment Expenses The Company’s reserves for unpaid losses and loss adjustment expenses represent the estimated ultimate cost of settling all reported claims plus all claims we incurred related to insured events that have occurred as of the reporting date, but that policyholders have not yet reported to the Company (incurred but not reported, or “IBNR”). The reserve for unpaid losses is the estimate of amounts necessary to settle all reported and unreported incurred claims for the ultimate cost of insured losses, based upon the facts of each case and the Company’s experience with similar cases. Salvage and subrogation are deducted from the reserve for claims and claims expense on a cash basis. The establishment of appropriate reserves, including reserves for catastrophe losses, is an inherently uncertain and complex process. Reserve estimates are primarily derived using an actuarial estimation process in which historical loss patterns are applied to actual paid losses and reported losses (paid losses plus individual case reserves established by claim adjusters) for an accident or report year to create an estimate of how losses are likely to develop over time. Development factors are calculated quarterly and periodically throughout the year for data elements such as claims reported and settled, paid losses, and paid losses combined with case reserves. The historical development patterns for these data elements are used as the assumptions to calculate reserve estimates, including the reserves for reported and unreported claims. Reserve estimates are regularly reviewed and updated, using the most current information available. Any resulting re-estimates are reflected in current results of operations. The Company reports its reserves for unpaid losses and loss adjustment expenses gross of the amounts related to unpaid losses recoverable from reinsurers and reports loss and loss adjustment expenses net of amounts ceded to reinsurers. The Company does not discount its loss reserves for financial statement purposes. |
Other Revenue | Other Revenue Our insurance affiliates may charge policyholders a policy fee on each policy written; to the extent these fees are not subject to refund, and the Company recognizes the income immediately when collected, which coincide with related service obligations. The Company also charges pay-plan fees to policyholders that pay its premiums in more than one installment and records the fees as income when collected. Other income also includes rental income due under non-cancelable leases for space at the Company’s commercial property. |
Assessments | Assessments Guaranty fund and other insurance-related assessments imposed upon the Company’s insurance company affiliates are recorded as policy acquisition costs in the period the regulatory agency imposes the assessment. To recover assessments which are paid in advance to the guaranty fund or other insurance-related entity, the Company recoups such assessments from our policyholders in the form of a policy surcharge. Once the recoupment period begins, the entire recoupment amount is recorded as an asset on our balance sheet. There were no such assessments during the periods presented. The Company collects pass through assessments imposed upon policyholders as a policy surcharge and records the amounts collected as a liability until the Company remits the amounts to the regulatory agency that imposed the assessment. |
Convertible Notes | Convertible Notes In August 2017 and September 2017, the Company issued collectively $ 136.8 million of 5.875 % Convertible Senior Notes (the “Convertible Notes”) due August 1, 2037 . As of December 31, 2022, the Company has approximately $ 885,000 of the Convertible Notes outstanding. This amount is net of $ 21.1 million of Convertible Notes reacquired and held by an insurance company subsidiary. Refer Note 14 “ Long-Term Debt” to these consolidated financial statements for further information . |
Debt Issuance and Discount Costs | Debt Issuance and Discount Costs In connection with the issuance of debt, any debt issuance and discount costs are reflected on the balance sheet as an offset to long-term debt and amortized using the effective interest method over the life of the underlying debt instrument. As of December 31, 2022, all debt issuance and discount costs have been fully amortized. |
Stock-Based Compensation | Stock-Based Compensation The Company measures stock-based compensation at the grant date based on the fair value of the award and recognizes stock-based compensation expense over the requisite vesting period in accordance with ASC Topic 718, Compensation—Stock Compensation . For awards with performance-based vesting conditions expense is not recognized until it is determined that it is probable the performance-based conditions will be met. When achievement of a performance-based condition is probable, a catch-up of expense will be recorded as if the award had been vesting on a straight line basis from the award date. The award will continue to be expensed on a straight-line basis until probability of achieving the performance-based conditions changes, if applicable. |
Earnings Per Share | Earnings Per Share Basic net earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the reporting period. Diluted net earnings per share is computed by dividing net income by the weighted average number of common and common equivalent shares outstanding during the reported period. Common equivalent shares include incremental shares from diluted vested and unvested shares of restricted common stock and convertible notes outstanding during the period based on the "if converted" method under the guidance of ASU 2020-06, adopted by the Company on January 1, 2022. |
Income Tax | Income tax Income taxes are accounted for under the asset and liability method, that recognizes the amount of income taxes payable or refundable for the current year and recognizes deferred tax assets and liabilities based on the tax rates expected to be in effect during the periods in which the temporary differences reverse. Temporary differences arise when income or expenses are recognized in different periods in the consolidated financial statements than on the tax returns. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that all, or some portion, of the benefits related to deferred tax assets will not be realized. Income taxes includes both estimated federal and state income taxes. |
Reclassification | Reclassification Certain prior year amounts have been reclassified to conform to the current year presentation. |
Accounting Pronouncements | Accounting Pronouncements Adopted In August 2020, the FASB issued ASU 2020-06, "Accounting for Convertible Instruments and Contracts in an Entity's Own Equity". The ASU i) simplifies the accounting for convertible debt and convertible preferred stock by reducing the number of accounting models, and amends certain disclosures, ii) amends and simplifies the derivative scope exception guidance for contracts in an entity's own equity, including share-based compensation, and iii) amends the diluted earnings per share calculations for convertible instruments and contracts in an entity's own equity. The if-converted method will be the only permissible method for computing the dilutive effect of the convertible debt instruments. Interest expense no longer includes amortization of debt discount. The Company adopted the guidance of ASU 2020-06 on January 1, 2022, reporting no material impact to the Company's consolidated condensed financial statements or disclosures for the year ended December 31, 2022. Accounting Pronouncements Not Yet Adopted The Company describes below recent pronouncements that may have a significant effect on its consolidated financial statements or on its disclosures upon future adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on, or are unrelated to, its financial condition, results of operations, or related disclosures. In March 2022, the FASB issued ASU 2022-02, “2022-02 Financial Instruments-Credit Losses” (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”). ASU 2022-02 requires that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases. ASU 2022-02 is effective for annual periods beginning after December 15, 2022, including interim periods within those periods. Early adoption is permitted. The Company will adopt ASU 2022-02 during the first quarter of 2023 and will provide the required disclosures, if determined to be material. In June 2022, the FASB issued ASU 2022-03 , Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). ASU 2022-03 clarifies that a contractual sales restriction on an equity security is not considered when determining the security's fair value. This ASU was issued to eliminate diversity in practice by clarifying that contractual arrangements restricting an entity's ability to sell the security for a certain period of time is a characteristic of the reporting entity and should not be contemplated when determining the security's fair value. ASU 2022-03 requires new disclosures that provide investors with information about the restriction, including the nature and remaining duration of the restriction. The ASU is effective for annual periods beginning after December 15, 2023, including interim periods within those annual periods. Early adoption is permitted. We are currently evaluating the impact of this guidance. Although there are several other new accounting pronouncements issued by the FASB, the Company does not believe any of these accounting pronouncements have or will have a material impact on its consolidated financial statements. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Amortized Cost, Gross Unrealized Gains and Losses, and Fair Value of Debt Securities Available-for-Sale | The amortized cost, gross unrealized gains and losses, and fair value of the Company’s debt securities available-for-sale are as follows: December 31, 2022 Cost or Adjusted / Gross Unrealized Gross Unrealized Fair Value (in thousands) Debt Securities Available-for-sale U.S. government and agency securities (1) $ 121,811 $ 24 $ 4,093 $ 117,742 States, municipalities and political subdivisions 104,361 — 12,734 91,627 Special revenue 284,946 1 34,817 250,130 Industrial and miscellaneous 194,430 90 18,447 176,073 Total $ 705,548 $ 115 $ 70,091 $ 635,572 (1) Includes securities at December 31, 2022 with a carrying amount of $ 24.3 million that were pledged as collateral for the advance agreement entered into with a financial institution in 2018. The Company is permitted to withdraw or exchange any portion of the pledged collateral over the minimum requirement at any time. December 31, 2021 Cost or Adjusted / Gross Unrealized Gross Unrealized Fair Value (in thousands) Debt Securities Available-for-sale U.S. government and agency securities (1) $ 73,923 $ 184 $ 282 $ 73,825 States, municipalities and political subdivisions 106,727 242 1,270 105,699 Special revenue 291,005 1,084 3,520 288,569 Hybrid securities 99 — — 99 Industrial and miscellaneous 203,491 636 2,965 201,162 Total $ 675,245 $ 2,146 $ 8,037 $ 669,354 (1) Includes securities at December 31, 2021 with a carrying amount of $ 22.5 million that were pledged as collateral for the advance agreement entered into with a financial institution in 2018. The Company is permitted to withdraw or exchange any portion of the pledged collateral over the minimum requirement at any time. |
Summary of Fixed Maturity Securities by Contractual Maturity Periods | The table below summarizes the Company’s fixed maturity securities at December 31, 2022 and 2021 by contractual maturity periods. Actual results may differ as issuers may have the right to call or prepay obligations, with or without penalties, prior to the contractual maturity of those obligations. December 31, 2022 Cost or Amortized Cost Percent of Total Fair Value Percent of Total Debt Securities Available-for-sale (in thousands) (in thousands) Due in one year or less $ 115,959 16 % $ 113,683 18 % Due after one year through five years 344,554 49 % 314,420 49 % Due after five years through ten years 182,793 27 % 150,906 25 % Due after ten years 62,242 9 % 56,564 9 % Total $ 705,548 100 % $ 635,572 100 % December 31, 2021 Cost or Amortized Cost Percent of Total Fair Value Percent of Total Debt Securities Available-for-sale (in thousands) (in thousands) Due in one year or less $ 42,200 6 % $ 42,323 6 % Due after one year through five years 311,799 46 % 309,744 46 % Due after five years through ten years 224,654 33 % 220,777 33 % Due after ten years 96,592 15 % 96,510 15 % Total $ 675,245 100 % $ 669,354 100 % |
Schedule of Net Realized (Losses) Gains on Debt Securities Available-for-sale | The following table presents net realized (losses) gains on the Company’s debt securities available-for-sale for the years ended December 31, 2022, 2021 and 2020, respectively: For the Years ended December 31, 2022 2021 2020 Realized Gains (Losses) Fair Value at Sale Realized Gains (Losses) Fair Value at Sale Realized Gains (Losses) Fair Value at Sale (in thousands) Debt Securities Available-for-sale Realized gains $ 37 $ 4,836 $ 716 $ 26,029 $ 22,466 $ 374,863 Realized losses ( 295 ) 22,245 ( 652 ) 4,359 ( 71 ) 6,368 Net realized (losses) gains $ ( 258 ) $ 27,081 $ 64 $ 30,388 $ 22,395 $ 381,231 |
Schedule of Reconciliation of Net Realized and Unrealized (Losses) Gains on Investments | The following table presents the reconciliation of net realized and unrealized (losses) gains on the Company’s investments reported for the years ended December 31, 2022, 2021 and 2020, respectively: For the Year Ended December 31, 2022 2021 2020 (in thousands) Gross realized gains on sales of available-for-sale securities $ 64 $ 716 $ 22,466 Gross realized losses on sales of available-for-sale securities ( 322 ) ( 652 ) ( 71 ) Gross realized and unrealized gains in other investments — 2,100 — Impairment charge in other investments — ( 2,180 ) — Net realized and unrealized (losses) gains $ ( 258 ) $ ( 16 ) $ 22,395 |
Schedule of Equity Investments | The following table presents the Company's equity investments as of December 31, 2022 and 2021, respectively. For the Year Ended December 31, 2022 2021 Common stock $ — $ — Membership Shares 1,514 1,415 Total equity investments $ 1,514 $ 1,415 |
Summary of Net Investment Income | The following table summarizes the Company’s net investment income by major investment category for the years ended December 31, 2022, 2021 and 2020, respectively: For the Year Ended December 31, 2022 2021 2020 (in thousands) Debt securities available-for-sale $ 11,037 $ 7,220 $ 12,067 Equity securities 50 — — Cash and cash equivalents 2,257 71 223 Other investments 693 1,435 1,100 Net investment income 14,037 8,726 13,390 Investment expenses 2,060 3,074 1,088 Net investment income, less investment expenses $ 11,977 $ 5,652 $ 12,302 |
Schedule of Debt Securities Available-for-Sale in an Unrealized Loss Position, Aggregate Fair Value | The following tables present, for all debt securities available-for-sale in an unrealized loss position, for which no allowance for credit loss is established (including securities pledged), the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position: Less Than Twelve Months Twelve Months or More December 31, 2022 Number of Gross Fair Value Number of Gross Fair Value (in thousands) Debt Securities Available-for-sale U.S. government and agency securities 61 $ 2,040 $ 56,389 36 $ 2,053 $ 56,389 States, municipalities and political subdivisions 28 1,967 17,730 95 10,767 68,852 Special revenue 273 5,832 57,881 259 28,985 167,384 Industrial and miscellaneous 95 1,535 32,387 197 16,912 134,462 Total 457 $ 11,374 $ 164,386 587 $ 58,717 $ 427,087 Less Than Twelve Months Twelve Months or More December 31, 2021 Number of Gross Fair Value Number of Gross Fair Value (in thousands) Debt Securities Available-for-sale U.S. government and agency securities 43 $ 282 $ 57,420 — $ — $ — States, municipalities and political subdivisions 98 1,270 80,972 — — — Special revenue 253 3,485 195,450 14 35 1,214 Industrial and miscellaneous 191 2,387 146,746 18 578 11,598 Total 585 $ 7,424 $ 480,588 32 $ 613 $ 12,812 |
Summary of Carrying Value and Maximum Loss Exposure of Company's Non-consolidated VIEs by Category | The following table summarizes the Company’s non-consolidated VIEs by category at December 31, 2022 and 2021 (in thousands): Carrying Value For the Year Ended December 31, Balance Sheet Method 2022 2021 Other Real Estate LLC Other Investments Equity Method $ 1,508 $ 1,843 Real Estate Corporation (1) Other Investments Measure Alternative 2,377 2,977 Preferred Interests (2) Other Investments Amortized Cost 8,490 15,000 Non-real estate related (3) Other Investments Equity Method 2,009 2,009 Insurtech Stock (4) Other Investments Measure Alternative 2,100 2,100 Total non-consolidated VIEs $ 16,484 $ 23,929 (1) For the year ended December 31, 2021, a $ 1.0 million impairment was recognized in net realized and unrealized gains (losses) on the Statement of Operations. (2) The preferred membership interests issued originally at $ 7.5 million and $ 9.9 million were measured at amortized cost under the guidance of ASC 320 and are subject to a fixed principal and interest payment schedule with maturity dates of February 1, 2023 and April 1, 2024 , respectively. As of December 31, 2022, the Company received in aggregate a return of capital of approximately $ 14.0 million and executed a new preferred membership interest agreement in aggregate of $ 8.5 million subject to fixed principal and interest schedules with a maturity date of July 1, 2027 . (3) Certain underlying assets of the funds are expected to be liquidated over the period of approximately 3 to 5 years from December 31, 2021. In addition, the Company does not have the ability to redeem or withdraw from the funds, or to sell, assign, or transfer its investment, without the consent of the General Partner or Managers of each fund, but will receive distributions based on the liquidation of the underlying assets and interest processed from the underlying assets. (4) For the year ended December 31, 2021, the Company acquired common shares and warrants of an Insurtech company. The following table summarizes the carrying value and maximum loss exposure of the Company’s non-consolidated VIEs at December 31, 2022 and 2021: As of December 31, 2022 As of December 31, 2021 Carrying Value Maximum Loss Exposure Carrying Value Maximum Loss Exposure (in thousands) Investments in non-consolidated VIEs $ 16,484 $ 16,484 $ 23,929 $ 23,929 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill Amount Balance as of December 31, 2019 $ 152,459 Goodwill acquired — Impairment ( 60,500 ) Balance as of December 31, 2021 $ 91,959 Goodwill acquired — Impairment ( 91,959 ) Balance as of December 31, 2022 $ ( 0 ) |
Schedule of Finite-lived Intangible Assets | The tables below detail the finite-lived intangible assets, net as of December 31, 2022 and 2021, respectively (amounts in thousands): For the Year Ended December 31, 2022 2021 Amortizing intangible assets (in thousands) Brand $ 1,210 $ 1,210 Agent relationships 15,500 15,500 Renewal rights 57,200 57,200 Customer relations 870 870 Trade names 9,000 9,000 Non-compete 4,790 4,790 88,570 88,570 Accumulated amortization ( 40,310 ) ( 33,959 ) Total infinite-lived intangible assets, net 48,260 54,611 Indefinite-lived intangible assets: License acquired 1,315 1,315 Total intangible assets, net $ 49,575 $ 55,926 |
Schedule of Estimated Amortization of Intangible Assets | Estimated annual pretax amortization of intangible assets for each of the next five years and thereafter is as follows (in thousands): Year Amount 2023 $ 6,351 2024 6,351 2025 6,315 2026 6,114 2027 5,881 Thereafter 17,249 $ 48,260 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net (Loss) Income Per Share | The following table sets forth the computation of basic and diluted net (loss) income per share for the periods indicated: For the Year Ended December 31, 2022 2021 2020 Basic (loss) earnings per share: Net (loss) income attributable to common stockholders (000's) $ ( 154,363 ) $ ( 74,727 ) $ 9,326 Weighted average shares outstanding 26,343,826 27,804,355 27,978,519 Basic (loss) earnings per share: $ ( 5.86 ) $ ( 2.69 ) $ 0.33 Diluted (loss) earnings per share: Net (loss) income attributable to common stockholders (000's) $ ( 154,363 ) $ ( 74,727 ) $ 9,326 Weighted average shares outstanding 26,343,826 27,804,355 27,978,519 Add: Effect of dilutive securities Impact of unvested equity awards — — 10,447 Diluted weighted average common shares outstanding 26,343,826 27,804,355 27,988,966 Diluted (loss) earnings per share: $ ( 5.86 ) $ ( 2.69 ) $ 0.33 The Company had 84,263 and 1,569,236 anti-dilutive shares for the years ended December 31, 2022 and 2021, respectively. The convertible notes were excluded from the computations because the conversion price on these notes was greater than the average market price of our common shares during each of the respective periods, and therefore, would be anti-dilutive to earnings per share under the "if converted" method under the guidance of ASU 2020-06, adopted by the Company on January 1, 2022. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurements | The following table presents information about the Company’s assets measured at fair value on a recurring basis. The Company assesses the levels for the investments at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfer in accordance with the Company’s accounting policy regarding the recognitions of transfers between levels of the fair value hierarchy. For the years ended December 31, 2022 and 2021, there were no transfers in or out of Level 1, 2, and 3. December 31, 2022 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Invested Assets: (in thousands) Debt Securities Available-for-sale U.S. government and agency securities $ 117,742 $ — $ 117,742 $ — States, municipalities and political subdivisions 91,627 — 91,627 — Special revenue 250,130 — 250,130 — Industrial and miscellaneous 176,073 — 176,073 — Total debt securities $ 635,572 $ — $ 635,572 $ — December 31, 2021 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Invested Assets: (in thousands) Debt Securities Available-for-sale U.S. government and agency securities $ 73,825 $ 364 $ 73,461 $ — States, municipalities and political subdivisions 105,699 — 105,699 — Special revenue 288,569 — 288,569 — Hybrid securities 99 — 99 — Industrial and miscellaneous 201,162 — 201,162 — Total debt securities $ 669,354 $ 364 $ 668,990 $ — |
Schedule of Assets Measured at Estimated Fair Value on Nonrecurring Basis | The following table presents information for assets measured at an estimated fair value on a nonrecurring basis as of December 31, 2022: Other Investments Carrying Value Balance, January 1, 2022 Amounts impaired Carrying Value Balance, December 31, 2022 (in thousands) Goodwill (1) $ 91,959 $ ( 91,959 ) — Total $ 91,959 $ ( 91,959 ) $ — Other Investments Carrying Value Balance, January 1, 2021 Amounts impaired Carrying Value Balance, December 31, 2021 (in thousands) Goodwill (1) $ 152,459 $ ( 60,500 ) 91,959 Total $ 152,459 $ ( 60,500 ) $ 91,959 (1) Non-cash impairment charge recorded in operating expenses in the consolidated statement of operations by the legal entity or related holding companies acquired. Goodwill that is impaired and subject to nonrecurring fair value measurements is a Level 3 valuation. During the second quarter of 2022, |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Summary of Other Comprehensive (loss) income and Tax Impact of Each Component of Other Comprehensive (loss) income | The following table is a summary of other comprehensive (loss) income and discloses the tax impact of each component of other comprehensive (loss) income for the years ended December 31, 2022, 2021 and 2020, respectively: For the Year Ended December 31, 2022 2021 2020 Pre-tax Tax After- Pre- Tax After- Pre-tax Tax After- (in thousands) Other comprehensive (loss) income Change in unrealized gains on investments, net $ ( 64,335 ) 15,126 $ ( 49,209 ) $ ( 13,661 ) 3,081 $ ( 10,580 ) $ 20,738 $ ( 4,807 ) $ 15,931 Reclassification adjustment of realized (gains) losses included in net (loss) income 258 ( 61 ) 197 ( 64 ) 14 ( 50 ) ( 22,395 ) 5,191 $ ( 17,204 ) Effect on other comprehensive (loss) income $ ( 64,077 ) $ 15,065 $ ( 49,012 ) $ ( 13,725 ) $ 3,095 $ ( 10,630 ) $ ( 1,657 ) $ 384 $ ( 1,273 ) |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | The following table summarizes the Company’s other assets for the years ended December 31, 2022 and 2021: Description December 31, 2022 December 31, 2021 (in thousands) Other amounts receivable $ 1,363 $ 1,934 State underwriting pooling & assoc. 4,697 3,956 Prepaid expense 4,694 6,382 Unallocated Remittances 755 — Total other assets $ 11,509 $ 12,272 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Components of Lease Costs | The components of lease costs were as follows (in thousands) for the respective years: For the Year Ended For the Year Ended Operating lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations $ 1,449 $ 1,359 Finance lease cost: Amortization of assets, included in General & Administrative expenses on the Consolidated Statements of Operations 2,591 1,969 Interest on lease liabilities, included in Interest expense on the Consolidated Statements of Operations 977 785 Total finance lease cost $ 3,568 $ 2,754 Variable lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations $ 952 $ 542 Short-term lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations $ 188 $ 106 |
Right-of-Use Lease Asset and Lease Liability | Right-of-use lease asset and Lease Liability was as follows (in thousands): Operating Leases December 31, 2022 December 31, 2021 Right of use assets $ 7,335 $ 5,035 Lease liability $ 8,690 $ 6,551 Finance Leases Right of use assets $ 20,132 $ 22,718 Lease liability $ 22,557 $ 24,621 |
Weighted-Average Remaining Lease Term and Discount Rate for Operating and Financing Leases | Weighted-average remaining lease term and discount rate for our operating and financing leases was as follows: Weighted-average remaining lease term December 31, 2022 December 31, 2021 Operating lease 6.49 yrs. 6.23 yrs. Finance lease 8.13 yrs. 9.1 yrs. Weighted-average discount rate Operating lease 5.14 % 5.33 % Finance lease 4.16 % 4.18 % |
Supplemental Disclosure of Cash Flow Information Related to Leases | Supplemental disclosure of cash flow information related to leases were as follows: For the Year Ended For the Year Ended Cash payments for: (in thousands) Finance lease - Operating cash flows $ 975 $ 291 Finance lease - Financing cash flows $ 2,063 $ 599 Operating lease - Operating cash flows (fixed payments) $ 1,610 $ 1,505 Operating lease - Operating cash flows (liability reduction) $ 1,251 $ 1,133 |
Maturities of Lease Liabilities for Financing and Operating Leases | Maturities of lease liabilities for financing and operating leases were as follows as of December 31, 2022 (in thousands): Financing Lease Operating Lease 2023 $ 3,085 $ 1,593 2024 3,101 1,572 2025 3,166 1,462 2026 3,197 1,469 2027 3,190 1,504 2028 and thereafter 10,920 2,639 Total lease payments 26,659 10,239 Less: imputed interest ( 4,102 ) ( 1,549 ) Present value of lease liabilities $ 22,557 $ 8,690 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net consists of the following at December 31, 2022 and 2021: December 31, 2022 December 31, 2021 (in thousands) Land $ 2,582 $ 2,582 Building 9,599 10,141 Software in progress 6,884 — Computer hardware and software 8,851 7,204 Office furniture and equipment 1,381 1,355 Tenant and leasehold improvements 10,485 8,255 Vehicle fleet 594 720 Total, at cost 40,376 30,257 Less: accumulated depreciation and amortization ( 14,647 ) ( 12,831 ) Property and equipment, net $ 25,729 $ 17,426 |
Schedule of Expected Annual Rental Income Due Under Non-Cancellable Operating Leases for Real Estate Properties | Expected annual rental income due under non-cancellable operating leases for our real estate properties is as follows (in thousands): Year Amount 2023 $ 3,000 2024 2,751 2025 2,466 2026 2,518 2027 2,569 2028 and Thereafter 14,571 Total $ 27,874 |
Deferred Reinsurance Ceding C_2
Deferred Reinsurance Ceding Commission (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Schedule of Activity with Regard to Deferred Reinsurance Ceding Commission | The table below depicts the activity with regard to deferred reinsurance ceding commission during the years ended December 31, 2022, 2021 and 2020. For the Year Ended December 31, 2022 2021 2020 (in thousands) Beginning balance of deferred ceding commission income $ 40,405 $ 39,995 $ 37,464 Ceding commission deferred $ 64,201 63,131 59,664 Less: ceding commission earned $ ( 61,848 ) ( 62,721 ) ( 57,134 ) Ending balance of deferred ceding commission income $ 42,757 $ 40,405 $ 39,995 |
Deferred Policy Acquisition C_2
Deferred Policy Acquisition Costs (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Summary of Activity in Deferred Policy Acquisition Costs (DPAC) | The Company anticipates that its DPAC costs will be fully recoverable in the near term. The table below depicts the activity with regard to DPAC for the years ended December 31, 2022, 2021 and 2020: For the Year Ended December 31, 2022 2021 2020 (in thousands) Beginning Balance $ 93,881 $ 89,265 $ 77,211 Policy acquisition costs deferred $ 202,793 193,106 171,275 Amortization $ ( 197,057 ) ( 188,490 ) ( 159,220 ) Ending Balance $ 99,617 $ 93,881 $ 89,265 |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Schedule of 2022-2023 Reinsurance Towers by Region | 2022-2023 Reinsurance Towers by Region The following graphics depict our reinsurance program structure for the 2022-2023 hurricane season by region. Millions $ 1,220.3 Layer 4 FL/SE 100 % of $ 100 M xs $ 550 M 100 % $ 1,120.3 Layer 3 100 % of $ 160 M xs $ 390 M 100 % $ 960.3 $ 910.6 FHCF Layer 90 % of 633.7 M 276.9 M 570.3 M) $ 276.9 Layer 2 100 % of $ 250 M xs $ 140 M 100 % $ 140.0 Layer 1 100 % of $ 100 M xs $ 40 M 100 % $ 40.0 Retention FL 1st Event Millions $ 1,220.0 Northeast Only 72.97 % of $ 370 M xs $ 85 0M 100 % Northeast Only Bond 27.03 % of $ 370 M xs $ 850 M $ 850.0 Multi-Zonal 100 % of 300 M xs $ 550 M 100 % $ 550.0 Layer 3 100 % of $ 160 M xs $ 39 0M 100 % $ 390.0 Layer 2 100 % of $ 250 M xs $ 140 M 100 % $ 140.0 Layer 1 100 % of $ 100 M xs $ 40 M 100 % $ 40.0 Retention $ 20.0 Net Quota Share 50 % of $ 20 M NE 1st Event Millions $ 780.0 HI Only 100 % of $ 90 M xs $ 690 M 100 % $ 690.0 Multi-Zonal 100 % of 300 M xs $ 390 M 100 % $ 390.0 Layer 2 100 % of $ 250 M xs $ 140 M 100 % $ 140.0 Layer 1 100 % of $ 100 M xs $ 40 M 100 % $ 40.0 Retention HI 1st Event * xs = in excess |
Schedule of Effect of Reinsurance Arrangements in Consolidated Statement of Income | The Company’s reinsurance arrangements had the following effect on certain items in the Consolidated Statement of Income for the year ended December 31, 2022, 2021 and 2020: For the Year Ended December 31, 2022 Premiums Written Premiums Earned Losses and Loss (in thousands) Direct $ 1,275,031 $ 1,208,824 $ 1,318,001 Ceded ( 612,863 ) ( 571,759 ) ( 816,839 ) Net $ 662,168 $ 637,065 $ 501,162 For the Year Ended December 31, 2021 Premiums Written Premiums Earned Losses and Loss (in thousands) Direct $ 1,164,879 $ 1,144,162 $ 625,748 Ceded ( 553,147 ) ( 533,091 ) ( 198,378 ) Net $ 611,732 $ 611,071 $ 427,370 For the Year Ended December 31, 2020 Premiums Written Premiums Earned Losses and Loss (in thousands) Direct $ 1,080,100 $ 996,842 $ 609,593 Ceded ( 473,836 ) ( 452,120 ) ( 236,206 ) Net $ 606,264 $ 544,722 $ 373,387 |
Reserve for Unpaid Losses (Tabl
Reserve for Unpaid Losses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Summary of Reserve for Unpaid Losses | The table below summarizes the activity related to the Company’s reserve for unpaid losses: For the Year Ended December 31, 2022 2021 2020 (in thousands) Balance, beginning of period $ 590,166 $ 659,341 $ 613,533 Less: reinsurance recoverable on unpaid losses 301,757 397,688 393,630 Net balance, beginning of period 288,409 261,653 219,903 Incurred related to: Current year 497,428 430,907 392,976 Prior years 3,734 ( 3,537 ) ( 19,589 ) Total incurred 501,162 427,370 373,387 Paid related to: Current year 267,319 247,903 228,394 Prior years 150,126 152,711 103,243 Total paid 417,445 400,614 331,637 Net balance, end of period 372,126 288,409 261,653 Plus: reinsurance recoverable on unpaid losses 759,681 301,757 397,688 Balance, end of period $ 1,131,807 $ 590,166 $ 659,341 |
Summary of Incurred, Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | The following is information about incurred and paid claims development as of December 31, 2022, net of reinsurance, as well as cumulative claim payments and the total of incurred-but-not-reported liabilities plus expected development on reported claims included within the net incurred claims amounts. The information by accident year is presented as required supplementary information and are unaudited. Incurred Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance (in thousands, except number of claims) Unaudited Accident year 2013 & 2014 2015 2016 2017 2018 2019 2020 2021 2022 Net IBNR Reported 2013 & prior $ 166,922 $ 169,325 $ 169,462 $ 168,497 $ 169,008 $ 168,824 $ 169,192 $ 169,266 $ 169,318 $ 169,542 $ 48 66,479 2014 118,991 114,899 113,847 114,984 115,838 115,234 115,409 115,708 115,572 103 18,506 2015 179,255 197,744 203,792 205,164 206,011 205,437 204,961 204,944 526 26,130 2016 237,207 242,611 250,990 250,235 250,067 250,482 249,315 1,482 27,633 2017 189,163 195,240 192,749 194,618 195,602 211,386 15,657 73,350 2018 199,565 193,672 192,474 198,064 207,569 4,155 34,481 2019 258,876 231,545 230,691 237,250 8,878 26,362 2020 370,058 362,108 372,212 25,904 39,812 2021 388,949 357,677 43,281 33,015 2022 447,827 172,917 38,117 Total $ 2,573,293 $ 272,951 Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance Unaudited Accident year 2013 & 2014 2015 2016 2017 2018 2019 2020 2021 2022 2013 & prior $ 137,094 $ 153,466 $ 159,682 $ 162,009 $ 164,448 $ 166,456 $ 167,666 $ 168,924 $ 169,084 $ 169,452 2014 68,732 95,076 101,456 108,509 112,518 113,609 113,975 114,898 115,179 2015 103,918 162,654 181,672 192,967 197,524 199,600 201,495 202,848 2016 132,679 211,512 233,540 238,868 241,875 244,820 246,826 2017 103,148 169,743 178,622 184,313 188,928 194,079 2018 84,552 152,592 170,301 187,386 199,007 2019 124,664 185,667 207,714 222,246 2020 210,548 311,539 336,574 2021 213,830 300,731 2022 226,505 Total $ 2,213,447 |
Summary of Reconciliation of Reserve Balances to Liability for Unpaid Loss and Loss Adjustment Expenses | Reconciliation of Reserve Balances to Liability for Unpaid Loss and Loss Adjustment Expenses Unpaid Loss and Allocated Loss Adjustment Expense, Net of Reinsurance $ 359,846 Reinsurance recoverable on unpaid losses 759,681 Unpaid Unallocated Loss Adjustment Expense 12,280 Unpaid losses and loss adjustment expenses $ 1,131,807 |
Summary of Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance as of December 31, 2022 (Unaudited) Year - 1 Year - 2 Year - 3 Year - 4 Year - 5 Thereafter Percentage 55 % 29 % 7 % 4 % 2 % 3 % |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Company's Long-Term Debt | The following table summarizes the Company’s long-term debt: December 31, 2022 December 31, 2021 (in thousands) Convertible debt $ 885 $ 23,413 Mortgage loan 11,199 11,521 Credit loan facility 89,125 69,125 Revolving credit facility 10,000 — FHLB loan agreement 19,200 19,200 Total principal amount $ 130,409 $ 123,259 Deferred finance costs $ 1,466 $ 2,502 Total long-term debt $ 128,943 $ 120,757 |
Schedule of Principal Payments on Long-Term Debt | The schedule of principal payments on long-term debt is as follows: December 31, Amount 2023 $ 29,039 2024 9,854 2025 9,874 2026 71,018 2027 414 Thereafter 10,210 Total principal payments $ 130,409 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Summary of Provision for Income Taxes | The following table summarizes the provision for income taxes: For the Year Ended December 31, 2022 2021 2020 (in thousands) Federal: Current $ ( 1,196 ) $ 3,015 $ ( 14,863 ) Deferred ( 9,714 ) ( 5,872 ) 6,859 Benefit for Federal income tax ( 10,910 ) ( 2,857 ) ( 8,004 ) State: Current 592 1,634 1,501 Deferred ( 1,489 ) ( 84 ) ( 610 ) (Benefit)/Provision for State income tax expense ( 897 ) 1,550 891 Benefit for income taxes $ ( 11,807 ) $ ( 1,307 ) $ ( 7,113 ) |
Summary of U.S. Federal Income Tax Rate to Pretax Income | The income tax (benefit) expense differs from the amounts computed by applying the U.S. federal income tax rate of as indicated below to pretax income as a result of the following (in thousands): For the Year Ended December 31, 2022 2021 2020 Expected income tax expense at federal rate 21.0 % 21.0 % 21.0 % State tax expense 1.0 % ( 1.0 )% 25.9 % Permanent items ( 0.3 )% ( 0.5 )% 16.0 % Goodwill impairment ( 10.6 )% ( 16.7 )% 0.0 % Non-deductible stock compensation ( 0.1 )% ( 0.2 )% 22.4 % Tax exempt interest 0.1 % 0.1 % ( 18.4 )% Executive compensation 162(m) ( 0.2 )% ( 0.2 )% 20.3 % Political contributions 0.0 % ( 0.2 )% 6.2 % Tax rate change 0.0 % ( 0.5 )% ( 409.1 )% Valuation allowance ( 3.8 )% 0.0 % 0.0 % Other 0.0 % 0.0 % ( 5.6 )% Reported income tax expense 7.11 % 1.7 % ( 321.3 )% |
Components of Deferred Tax Assets and Liabilities | The significant components of deferred tax assets and liabilities included in the consolidated balance sheets as of December 31, 2022 and 2021 were as follows: For the Year Ended December 31, 2022 2021 Deferred tax assets: (in thousands) Unearned premiums $ 17,060 $ 15,805 Unearned commission 10,053 9,459 Net operating loss 1,189 1,222 Tax-related discount on loss reserve 4,902 3,872 Stock-based compensation 297 84 Accrued expenses 1,016 1,182 Leases 885 792 Unrealized losses 16,987 1,913 Dual Consolidated loss limitation 9,740 — Other 238 472 Total deferred tax asset 62,367 34,801 Valuation allowance ( 6,376 ) — Adjusted deferred tax asset 55,991 34,801 Deferred tax liabilities: Deferred acquisition costs $ 23,420 $ 21,977 Prepaid expenses 180 177 Property and equipment 2,200 1,504 Note discount 290 187 Basis in purchased investments 28 34 Basis in purchased intangibles 11,178 14,550 Internal revenue code 481(a) — 4,416 Other 1,854 1,382 Total deferred tax liabilities 39,150 44,227 Net deferred tax assets (liabilities) $ 16,841 $ ( 9,426 ) |
Accounts Payable and Other Li_2
Accounts Payable and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Accounts Payable and Other Liabilities | Other liabilities consist of the following as of December 31, 2022 and 2021: Description December 31, 2022 December 31, 2021 (in thousands) Deferred ceding commission 42,758 $ 40,406 Accounts payable and other payables 17,660 10,086 Accrued dividends 72 1,634 Accrued interest and issuance costs 733 735 Other liabilities 229 195 Premium tax 1,001 871 Commission payables 17,558 17,598 Total other liabilities $ 80,010 $ 71,525 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Restricted Stock Activity | Restricted stock activity for the three years ended December 31, 2022, 2021 and 2020 is as follows: Weighted-Average Grant-Date Fair Number of shares Value per Share Non-vested, at December 31, 2019 345,534 $ 19.56 Granted 15,000 10.68 Vested ( 13,044 ) 13.17 Canceled and surrendered ( 247,223 ) 9.49 Non-vested, at December 31, 2020 100,267 $ 15.37 Granted - Performance-based restricted stock 174,689 9.45 Granted - Time-based restricted stock 80,104 9.68 Vested ( 43,711 ) 9.61 Canceled and surrendered ( 28,257 ) 10.69 Non-vested, at December 31, 2021 283,092 $ 9.32 Granted - Performance-based restricted stock 256,445 6.67 Granted - Time-based restricted stock 240,107 5.18 Vested ( 90,458 ) 4.81 Canceled and surrendered ( 40,693 ) 4.40 Non-vested, at December 31, 2022 648,493 $ 7.38 |
Additional Information Regarding Outstanding Unvested Restricted Stock | Additional information regarding the Company’s outstanding non-vested time-based restricted stock and performance-based restricted stock at December 31, 2022 is as follows: Grant date Restricted shares unvested Share Value at Grant Date Per Share Remaining Restriction Period (Years) February 12, 2018 25,000 16.35 0.0 January 4, 2021 111,857 10.43 1.2 April 13, 2021 32,681 10.71 1.2 October 18, 2021 56,853 6.89 1.2 March 3, 2022 12,727 5.50 2.2 March 16, 2022 322,421 6.72 2.2 June 23, 2022 86,954 3.22 0.5 648,493 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Unaudited Quarterly Results | The following table provides a summary of unaudited quarterly results for the periods presented (in thousands, except per share data): For the year ended December 31, 2022 First Quarter Second Quarter Third Quarter Fourth Quarter Net premiums earned $ 152,929 $ 158,271 $ 159,693 $ 166,171 Investment income $ 2,000 $ 2,163 $ 2,887 $ 4,927 Total revenues $ 158,608 $ 163,770 $ 165,493 $ 174,589 Total operating expenses (1) $ 198,019 $ 249,322 $ 212,801 $ 159,679 Operating (loss) income $ ( 39,411 ) $ ( 85,552 ) $ ( 47,308 ) $ 14,908 Net (loss) income $ ( 30,759 ) $ ( 87,866 ) $ ( 48,240 ) $ 12,501 Basic net (loss) income per share $ ( 1.15 ) $ ( 3.32 ) $ ( 1.83 ) $ 0.49 Diluted net (loss) income per share $ ( 1.15 ) $ ( 3.32 ) $ ( 1.83 ) $ 0.48 For the year ended December 31, 2021 First Quarter Second Quarter Third Quarter Fourth Quarter Net premiums earned $ 142,199 $ 146,499 $ 162,445 $ 159,928 Investment income $ 1,293 $ 956 $ 1,548 $ 1,855 Total revenues $ 147,243 $ 150,197 $ 167,408 $ 166,712 Total operating expenses (1) $ 153,075 $ 154,187 $ 182,785 $ 209,578 Operating (loss) income $ ( 5,832 ) $ ( 3,990 ) $ ( 15,377 ) $ ( 42,865 ) Net (loss) income $ ( 5,148 ) $ ( 3,950 ) $ ( 16,410 ) $ ( 49,218 ) Basic net (loss) income per share $ ( 0.19 ) $ ( 0.14 ) $ ( 0.59 ) $ ( 1.79 ) Diluted net (loss) income per share $ ( 0.19 ) $ ( 0.14 ) $ ( 0.59 ) $ ( 1.79 ) (1) The second quarter of 2022 and the fourth quarter of 2021 results include a $ 92.0 million and $ 60.5 million impairment of goodwill, respectively. Refer to Note 3 “ Goodwill and Other Intangible Assets ” to these consolidated financial statements for further information on our 2022 and 2021 goodwill impairment charge. |
Basis of Presentation, Nature_3
Basis of Presentation, Nature of Business and Significant Accounting Policies and Practices - Additional Information (Detail) | 12 Months Ended | ||||
Dec. 31, 2022 USD ($) Segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Sep. 30, 2017 USD ($) | Aug. 31, 2017 | |
Basis Of Presentation Nature Of Business And Significant Accounting Policies And Practices [Line Items] | |||||
Number of reporting Segment | Segment | 1 | ||||
Highly liquid investments with original maturity | 3 months | ||||
Restricted cash | $ 6,691,000 | $ 5,415,000 | |||
Interest income on restricted cash deposits | 12,612 | 11,918 | |||
Impairment charges on other investments | 0 | 2,200,000 | |||
Allowance for uncollectible premiums | 451,000 | 451,000 | |||
Bad debt expense, uncollectible premiums | 0 | 0 | $ 161,300 | ||
Ceding commission income | $ 61,848,000 | 62,721,000 | 57,134,000 | ||
Operating lease expiration year | 2031 | ||||
Convertible notes outstanding net of reacquired | $ 21,100 | ||||
Convertible Senior Notes [Member] | |||||
Basis Of Presentation Nature Of Business And Significant Accounting Policies And Practices [Line Items] | |||||
Aggregate principal amount | $ 136,800,000 | ||||
Interest rate | 5.875% | 5.875% | |||
Notes maturity date | Aug. 01, 2037 | ||||
Convertible Notes outstanding | $ 885,000,000 | ||||
Building [Member] | |||||
Basis Of Presentation Nature Of Business And Significant Accounting Policies And Practices [Line Items] | |||||
Property plant and equipment useful life | 40 years | ||||
Computer Hardware and Software [Member] | |||||
Basis Of Presentation Nature Of Business And Significant Accounting Policies And Practices [Line Items] | |||||
Property plant and equipment useful life | 3 years | ||||
NBIC [Member] | |||||
Basis Of Presentation Nature Of Business And Significant Accounting Policies And Practices [Line Items] | |||||
Ceding commission income | $ 61,900,000 | 62,700,000 | |||
Policy Acquisition Costs [Member] | |||||
Basis Of Presentation Nature Of Business And Significant Accounting Policies And Practices [Line Items] | |||||
Ceding commission income | $ 46,500,000 | $ 47,100,000 | $ 43,000,000 | ||
Minimum [Member] | Office and Furniture Equipment [Member] | |||||
Basis Of Presentation Nature Of Business And Significant Accounting Policies And Practices [Line Items] | |||||
Property plant and equipment useful life | 3 years | ||||
Maximum [Member] | |||||
Basis Of Presentation Nature Of Business And Significant Accounting Policies And Practices [Line Items] | |||||
Short-term investment securities with original maturity | 1 year | ||||
Maximum [Member] | Office and Furniture Equipment [Member] | |||||
Basis Of Presentation Nature Of Business And Significant Accounting Policies And Practices [Line Items] | |||||
Property plant and equipment useful life | 7 years |
Investments - Schedule of Amort
Investments - Schedule of Amortized Cost, Gross Unrealized Gains and Losses, and Fair Value of Debt Securities Available-for-Sale (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | ||
Schedule of Available-for-sale Securities [Line Items] | ||||
Debt Securities Available-for-sale, Cost or Adjusted /Amortized Cost | $ 705,548 | $ 675,245 | ||
Debt Securities Available-for-sale, Gross Unrealized Gains | 115 | 2,146 | ||
Debt Securities Available-for-sale, Gross Unrealized Losses | 70,091 | 8,037 | ||
Debt Securities Available-for-sale, Fair Value | 635,572 | 669,354 | ||
U.S. government and agency securities [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Debt Securities Available-for-sale, Cost or Adjusted /Amortized Cost | 121,811 | [1] | 73,923 | [2] |
Debt Securities Available-for-sale, Gross Unrealized Gains | 24 | [1] | 184 | [2] |
Debt Securities Available-for-sale, Gross Unrealized Losses | 4,093 | [1] | 282 | [2] |
Debt Securities Available-for-sale, Fair Value | 117,742 | [1] | 73,825 | [2] |
States, Municipalities and Political Subdivisions [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Debt Securities Available-for-sale, Cost or Adjusted /Amortized Cost | 104,361 | 106,727 | ||
Debt Securities Available-for-sale, Gross Unrealized Gains | 0 | 242 | ||
Debt Securities Available-for-sale, Gross Unrealized Losses | 12,734 | 1,270 | ||
Debt Securities Available-for-sale, Fair Value | 91,627 | 105,699 | ||
Special Revenue [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Debt Securities Available-for-sale, Cost or Adjusted /Amortized Cost | 284,946 | 291,005 | ||
Debt Securities Available-for-sale, Gross Unrealized Gains | 1 | 1,084 | ||
Debt Securities Available-for-sale, Gross Unrealized Losses | 34,817 | 3,520 | ||
Debt Securities Available-for-sale, Fair Value | 250,130 | 288,569 | ||
Hybrid Securities [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Debt Securities Available-for-sale, Cost or Adjusted /Amortized Cost | 99 | |||
Debt Securities Available-for-sale, Gross Unrealized Gains | 0 | |||
Debt Securities Available-for-sale, Gross Unrealized Losses | 0 | |||
Debt Securities Available-for-sale, Fair Value | 99 | |||
Industrial and Miscellaneous [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Debt Securities Available-for-sale, Cost or Adjusted /Amortized Cost | 194,430 | 203,491 | ||
Debt Securities Available-for-sale, Gross Unrealized Gains | 90 | 636 | ||
Debt Securities Available-for-sale, Gross Unrealized Losses | 18,447 | 2,965 | ||
Debt Securities Available-for-sale, Fair Value | $ 176,073 | $ 201,162 | ||
[1] Includes securities at December 31, 2022 with a carrying amount of $ 24.3 million that were pledged as collateral for the advance agreement entered into with a financial institution in 2018. The Company is permitted to withdraw or exchange any portion of the pledged collateral over the minimum requirement at any time. The Company’s unrealized losses on corporate bonds have not been recognized because the bonds are of a high credit quality with investment grade ratings. The decline in fair value is deemed to be caused by rising interest rates resulting in no credit loss allowance recorded for the year ended December 31, 2022. Includes securities at December 31, 2021 with a carrying amount of $ 22.5 million that were pledged as collateral for the advance agreement entered into with a financial institution in 2018. The Company is permitted to withdraw or exchange any portion of the pledged collateral over the minimum requirement at any time. |
Investments - Schedule of Amo_2
Investments - Schedule of Amortized Cost, Gross Unrealized Gains and Losses, and Fair Value of Debt Securities Available-for-Sale (Parenthetical) (Detail) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Investments, Debt and Equity Securities [Abstract] | ||
Carrying amount | $ 24.3 | $ 22.5 |
Investments - Summary of Fixed
Investments - Summary of Fixed Maturity Securities by Contractual Maturity Periods (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | ||
Debt Securities Available-for-sale Due in one year or less, Cost or Amortized Cost | $ 115,959 | $ 42,200 |
Debt Securities Available-for-sale Due after one year through five years, Cost or Amortized Cost | 344,554 | 311,799 |
Debt Securities Available-for-sale Due after five years through ten years, Cost or Amortized Cost | 182,793 | 224,654 |
Debt Securities Available-for-sale Due after ten years, Cost or Amortized Cost | 62,242 | 96,592 |
Debt Securities Available-for-sale, Cost or Adjusted /Amortized Cost | $ 705,548 | $ 675,245 |
Debt Securities Available-for-sale Due in one year or less, Percentage of Total | 16% | 6% |
Debt Securities Available-for-sale Due after one year through five years, Percentage of Total | 49% | 46% |
Debt Securities Available-for-sale Due after five years through ten years, Percentage of Total | 27% | 33% |
Debt Securities Available-for-sale Due after ten years, Percentage of Total | 9% | 15% |
Debt Securities Available-for-sale Total, Percentage | 100% | 100% |
Debt Securities Available-for-sale Due in one year or less, Fair Value | $ 113,683 | $ 42,323 |
Debt Securities Available-for-sale Due after one year through five years, Fair Value | 314,420 | 309,744 |
Debt Securities Available-for-sale Due after five years through ten years, Fair Value | 150,906 | 220,777 |
Debt Securities Available-for-sale Due after ten years, Fair Value | 56,564 | 96,510 |
Debt Securities Available-for-sale Total, Fair Value | $ 635,572 | $ 669,354 |
Debt Securities Available-for-sale Due in one year or less, Percentage of Total | 18% | 6% |
Debt Securities Available-for-sale Due after one year through five years, Percentage of Total | 49% | 46% |
Debt Securities Available-for-sale Due after five years through ten years, Percentage of Total | 25% | 33% |
Debt Securities Available-for-sale Due after ten years, Percentage of Total | 9% | 15% |
Debt Securities Available-for-sale Total, Percentage | 100% | 100% |
Investments - Additional Inform
Investments - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Investments [Line Items] | |||
Proceeds from the sale of debt securities | $ 27,100,000 | $ 30,400,000 | $ 381,200,000 |
Allowance for credit loss | 0 | ||
Net realized gains or (losses) on equity investments | 0 | 0 | |
Net unrealized gains or (losses) on equity investments | 0 | 0 | |
Impairment charge in other investments | $ 0 | $ (2,180,000) | $ 0 |
Investments - Schedule of Net R
Investments - Schedule of Net Realized Gains (Losses) on Debt Securities Available-for-sale (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Securities Available-for-sale | |||
Realized gains | $ 37 | $ 716 | $ 22,466 |
Realized losses | (295) | (652) | (71) |
Net realized (losses) gains | (258) | 64 | 22,395 |
Debt Securities Available-for-sale, Fair Value at Sale | |||
Realized gains, Fair Value at Sale | 4,836 | 26,029 | 374,863 |
Realized losses, Fair Value at Sale | 22,245 | 4,359 | 6,368 |
Net realized (losses) gains, Fair Value at Sale | $ 27,081 | $ 30,388 | $ 381,231 |
Investments - Schedule of Recon
Investments - Schedule of Reconciliation of Net Realized and Unrealized (Losses) Gains on Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |||
Gross realized gains on sales of available-for-sale securities | $ 64 | $ 716 | $ 22,466 |
Gross realized losses on sales of available-for-sale securities | (322) | (652) | (71) |
Gross realized and unrealized gains in other investments | 0 | 2,100 | 0 |
Impairment charge in other investments | 0 | (2,180) | 0 |
Net realized and unrealized (losses) gains | $ (258) | $ (16) | $ 22,395 |
Investments - Schedule of Equit
Investments - Schedule of Equity Investments (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of Equity Method Investments [Line Items] | ||
Total equity investments | $ 1,514 | $ 1,415 |
Common Stock [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Total equity investments | 0 | 0 |
Membership Shares [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Total equity investments | $ 1,514 | $ 1,415 |
Investments - Summary of Net In
Investments - Summary of Net Investment Income (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Gross investment income (loss) | $ 14,037 | $ 8,726 | $ 13,390 |
Investment expenses | 2,060 | 3,074 | 1,088 |
Net investment income, less investment expenses | 11,977 | 5,652 | 12,302 |
Debt Securities Available-for-Sale [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross investment income (loss) | 11,037 | 7,220 | 12,067 |
Equity Securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross investment income (loss) | 50 | ||
Cash and Cash Equivalents [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross investment income (loss) | 2,257 | 71 | 223 |
Other Investments [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross investment income (loss) | $ 693 | $ 1,435 | $ 1,100 |
Investments - Schedule of Debt
Investments - Schedule of Debt Securities Available-for-Sale in an Unrealized Loss Position, Aggregate Fair Value (Detail) $ in Thousands | Dec. 31, 2022 USD ($) Security | Dec. 31, 2021 USD ($) Security |
Schedule of Available-for-sale Securities [Line Items] | ||
Debt Securities Available-for-sale Less Than Twelve Months, Number of Securities | Security | 457 | 585 |
Debt Securities Available-for-sale Less Than Twelve Months, Gross Unrealized Losses | $ 11,374 | $ 7,424 |
Debt Securities Available-for-sale Less Than Twelve Months, Fair Value | $ 164,386 | $ 480,588 |
Debt Securities Available-for-sale Twelve Months or More, Number of Securities | Security | 587 | 32 |
Debt Securities Available-for-sale Twelve Months or More, Gross Unrealized Losses | $ 58,717 | $ 613 |
Debt Securities Available-for-sale Twelve Months or More, Fair Value | $ 427,087 | $ 12,812 |
U.S. government and agency securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Debt Securities Available-for-sale Less Than Twelve Months, Number of Securities | Security | 61 | 43 |
Debt Securities Available-for-sale Less Than Twelve Months, Gross Unrealized Losses | $ 2,040 | $ 282 |
Debt Securities Available-for-sale Less Than Twelve Months, Fair Value | $ 56,389 | $ 57,420 |
Debt Securities Available-for-sale Twelve Months or More, Number of Securities | Security | 36 | |
Debt Securities Available-for-sale Twelve Months or More, Gross Unrealized Losses | $ 2,053 | |
Debt Securities Available-for-sale Twelve Months or More, Fair Value | $ 56,389 | |
States, Municipalities and Political Subdivisions [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Debt Securities Available-for-sale Less Than Twelve Months, Number of Securities | Security | 28 | 98 |
Debt Securities Available-for-sale Less Than Twelve Months, Gross Unrealized Losses | $ 1,967 | $ 1,270 |
Debt Securities Available-for-sale Less Than Twelve Months, Fair Value | $ 17,730 | $ 80,972 |
Debt Securities Available-for-sale Twelve Months or More, Number of Securities | Security | 95 | |
Debt Securities Available-for-sale Twelve Months or More, Gross Unrealized Losses | $ 10,767 | |
Debt Securities Available-for-sale Twelve Months or More, Fair Value | $ 68,852 | |
Special Revenue [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Debt Securities Available-for-sale Less Than Twelve Months, Number of Securities | Security | 273 | 253 |
Debt Securities Available-for-sale Less Than Twelve Months, Gross Unrealized Losses | $ 5,832 | $ 3,485 |
Debt Securities Available-for-sale Less Than Twelve Months, Fair Value | $ 57,881 | $ 195,450 |
Debt Securities Available-for-sale Twelve Months or More, Number of Securities | Security | 259 | 14 |
Debt Securities Available-for-sale Twelve Months or More, Gross Unrealized Losses | $ 28,985 | $ 35 |
Debt Securities Available-for-sale Twelve Months or More, Fair Value | $ 167,384 | $ 1,214 |
Industrial and Miscellaneous [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Debt Securities Available-for-sale Less Than Twelve Months, Number of Securities | Security | 95 | 191 |
Debt Securities Available-for-sale Less Than Twelve Months, Gross Unrealized Losses | $ 1,535 | $ 2,387 |
Debt Securities Available-for-sale Less Than Twelve Months, Fair Value | $ 32,387 | $ 146,746 |
Debt Securities Available-for-sale Twelve Months or More, Number of Securities | Security | 197 | 18 |
Debt Securities Available-for-sale Twelve Months or More, Gross Unrealized Losses | $ 16,912 | $ 578 |
Debt Securities Available-for-sale Twelve Months or More, Fair Value | $ 134,462 | $ 11,598 |
Investments - Summary of Non-co
Investments - Summary of Non-consolidated VIEs by Category (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | |
Variable Interest Entity [Line Items] | |||
Other investments | $ 16,484 | $ 23,929 | |
Non-consolidated Variable Interest Entities [Member] | |||
Variable Interest Entity [Line Items] | |||
Other investments | 16,484 | 23,929 | |
Non-consolidated Variable Interest Entities [Member] | Other Real Estate LLC [Member] | |||
Variable Interest Entity [Line Items] | |||
Other investments | 1,508 | 1,843 | |
Non-consolidated Variable Interest Entities [Member] | Real Estate Corporation [Member] | |||
Variable Interest Entity [Line Items] | |||
Other investments | [1] | 2,377 | 2,977 |
Non-consolidated Variable Interest Entities [Member] | Preferred Interests [member] | |||
Variable Interest Entity [Line Items] | |||
Other investments | [2] | 8,490 | 15,000 |
Non-consolidated Variable Interest Entities [Member] | Non-real estate Related [Member] | |||
Variable Interest Entity [Line Items] | |||
Other investments | [3] | 2,009 | 2,009 |
Non-consolidated Variable Interest Entities [Member] | Insurtech Stock [Member] | |||
Variable Interest Entity [Line Items] | |||
Other investments | [4] | $ 2,100 | $ 2,100 |
[1] For the year ended December 31, 2021, a $ 1.0 million impairment was recognized in net realized and unrealized gains (losses) on the Statement of Operations. The preferred membership interests issued originally at $ 7.5 million and $ 9.9 million were measured at amortized cost under the guidance of ASC 320 and are subject to a fixed principal and interest payment schedule with maturity dates of February 1, 2023 and April 1, 2024 , respectively. As of December 31, 2022, the Company received in aggregate a return of capital of approximately $ 14.0 million and executed a new preferred membership interest agreement in aggregate of $ 8.5 million subject to fixed principal and interest schedules with a maturity date of July 1, 2027 . Certain underlying assets of the funds are expected to be liquidated over the period of approximately 3 to 5 years from December 31, 2021. In addition, the Company does not have the ability to redeem or withdraw from the funds, or to sell, assign, or transfer its investment, without the consent of the General Partner or Managers of each fund, but will receive distributions based on the liquidation of the underlying assets and interest processed from the underlying assets. For the year ended December 31, 2021, the Company acquired common shares and warrants of an Insurtech company. |
Investments - Summary of Non-_2
Investments - Summary of Non-consolidated VIEs by Category (Parenthetical) (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||||
Jul. 01, 2027 | Apr. 01, 2024 | Feb. 01, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Variable Interest Entity [Line Items] | ||||||
Net realized and unrealized gains (losses) | $ (258) | $ (16) | $ 22,395 | |||
Real Estate Corporation [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Net realized and unrealized gains (losses) | $ 1,000 | |||||
Minimum [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Assets of fund expected to be liquidated period | 3 years | |||||
Maximum [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Assets of fund expected to be liquidated period | 5 years | |||||
REIT and LLCs [Member] | Preferred Interests [member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Aggregate a return of capital | $ 14,000 | |||||
REIT and LLCs [Member] | Preferred Interests [member] | Forecast | ||||||
Variable Interest Entity [Line Items] | ||||||
Amortized cost | $ 9,900 | $ 7,500 | ||||
Preferred Units Maturity Date | Jul. 01, 2027 | Apr. 01, 2024 | Feb. 01, 2023 | |||
Aggregate a return of capital | $ 8,500 |
Investments - Summary of Carryi
Investments - Summary of Carrying Value and Maximum Loss Exposure of Company's Non-consolidated VIEs (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Variable Interest Entity [Line Items] | ||
Carrying Value | $ 16,484 | $ 23,929 |
Non-consolidated Variable Interest Entities [Member] | ||
Variable Interest Entity [Line Items] | ||
Carrying Value | 16,484 | 23,929 |
Maximum Loss Exposure | $ 16,484 | $ 23,929 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Jun. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite Lived Intangible Assets [Line Items] | ||||||
Goodwill | $ 91,959 | $ 0 | $ 91,959 | $ 152,459 | ||
Intangibles, net | 55,926 | 49,575 | 55,926 | |||
Indefinite lived intangible, insurance licenses | 1,315 | 1,315 | 1,315 | |||
Goodwill impairment | $ 92,000 | $ 60,500 | 91,959 | 60,500 | $ 0 | |
Amortization of intangible assets | $ 6,400 | $ 6,400 | $ 6,400 | |||
Minimum [Member] | ||||||
Finite Lived Intangible Assets [Line Items] | ||||||
Useful life of intangible asset | 1 year | |||||
Maximum [Member] | ||||||
Finite Lived Intangible Assets [Line Items] | ||||||
Useful life of intangible asset | 15 years |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Beginning balance | $ 91,959 | $ 152,459 | |||
Goodwill acquired | 0 | $ 0 | |||
Impairment | $ (92,000) | $ (60,500) | (91,959) | (60,500) | $ 0 |
Ending balance | $ 91,959 | $ 0 | $ 91,959 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Schedule of Finite-lived Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of Finite-Lived and Indefinite-Lived Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 88,570 | $ 88,570 |
Accumulated amortization | (40,310) | (33,959) |
Total infinite-lived intangible assets, net | 48,260 | 54,611 |
Indefinite lived intangible, license acquired | 1,315 | 1,315 |
Total intangible assets, net | 49,575 | 55,926 |
Brand [Member] | ||
Schedule of Finite-Lived and Indefinite-Lived Assets [Line Items] | ||
Finite-lived intangible assets, gross | 1,210 | 1,210 |
Agent Relationships [Member] | ||
Schedule of Finite-Lived and Indefinite-Lived Assets [Line Items] | ||
Finite-lived intangible assets, gross | 15,500 | 15,500 |
Renewal Rights [Member] | ||
Schedule of Finite-Lived and Indefinite-Lived Assets [Line Items] | ||
Finite-lived intangible assets, gross | 57,200 | 57,200 |
Customer Relations [Member] | ||
Schedule of Finite-Lived and Indefinite-Lived Assets [Line Items] | ||
Finite-lived intangible assets, gross | 870 | 870 |
Trade Names [Member] | ||
Schedule of Finite-Lived and Indefinite-Lived Assets [Line Items] | ||
Finite-lived intangible assets, gross | 9,000 | 9,000 |
Non-compete [Member] | ||
Schedule of Finite-Lived and Indefinite-Lived Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 4,790 | $ 4,790 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Schedule of Estimated Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 6,351 | |
2024 | 6,351 | |
2025 | 6,315 | |
2026 | 6,114 | |
2027 | 5,881 | |
Thereafter | 17,249 | |
Total infinite-lived intangible assets, net | $ 48,260 | $ 54,611 |
Earnings (Loss) Per Share - Sch
Earnings (Loss) Per Share - Schedule of Computation of Basic and Diluted Net Income (Loss) Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Basic (loss) earnings per share: | |||||||||||
Net (loss) income attributable to common stockholders (000's) | $ (154,363) | $ (74,727) | $ 9,326 | ||||||||
Weighted average shares outstanding | 26,343,826 | 27,804,355 | 27,978,519 | ||||||||
Basic | $ 0.49 | $ (1.83) | $ (3.32) | $ (1.15) | $ (1.79) | $ (0.59) | $ (0.14) | $ (0.19) | $ (5.86) | $ (2.69) | $ 0.33 |
Diluted (loss) earnings per share: | |||||||||||
Net (loss) income attributable to common stockholders (000's) | $ (154,363) | $ (74,727) | $ 9,326 | ||||||||
Weighted average shares outstanding | 26,343,826 | 27,804,355 | 27,978,519 | ||||||||
Add: Effect of dilutive securities | |||||||||||
Impact of unvested equity awards | 0 | 0 | 10,447 | ||||||||
Diluted weighted average common shares outstanding | 26,343,826 | 27,804,355 | 27,988,966 | ||||||||
Diluted | $ 0.48 | $ (1.83) | $ (3.32) | $ (1.15) | $ (1.79) | $ (0.59) | $ (0.14) | $ (0.19) | $ (5.86) | $ (2.69) | $ 0.33 |
Earnings (Loss) Per Share - S_2
Earnings (Loss) Per Share - Schedule of Computation of Basic and Diluted Net Income (Loss) Per Share (Detail) (Parenthetical) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Number of antidilutive shares | 84,263 | 1,569,236 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value of assets transfer between levels | $ 0 | $ 0 | |||
Goodwill impairment | $ 92,000,000 | $ 60,500,000 | $ 91,959,000 | 60,500,000 | $ 0 |
Fair Value, Nonrecurring [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Goodwill impairment | $ 92,000,000 | $ 60,500,000 |
Fair Value of Financial Measure
Fair Value of Financial Measurements - Schedule of Fair Value of Financial Instruments (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | $ 635,572 | $ 669,354 | ||
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | 0 | 364 | ||
Significant Other Observable Inputs (Level 2) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | 635,572 | 668,990 | ||
Significant Unobservable Inputs (Level 3) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | 0 | 0 | ||
U.S. government and agency securities [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | 117,742 | [1] | 73,825 | [2] |
U.S. government and agency securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | 0 | 364 | ||
U.S. government and agency securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | 117,742 | 73,461 | ||
U.S. government and agency securities [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | 0 | 0 | ||
States, Municipalities and Political Subdivisions [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | 91,627 | 105,699 | ||
States, Municipalities and Political Subdivisions [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | 0 | 0 | ||
States, Municipalities and Political Subdivisions [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | 91,627 | 105,699 | ||
States, Municipalities and Political Subdivisions [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | 0 | 0 | ||
Special Revenue [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | 250,130 | 288,569 | ||
Special Revenue [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | 0 | 0 | ||
Special Revenue [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | 250,130 | 288,569 | ||
Special Revenue [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | 0 | 0 | ||
Hybrid Securities [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | 99 | |||
Hybrid Securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | 0 | |||
Hybrid Securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | 99 | |||
Hybrid Securities [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | 0 | |||
Industrial and Miscellaneous [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | 176,073 | 201,162 | ||
Industrial and Miscellaneous [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | 0 | 0 | ||
Industrial and Miscellaneous [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | 176,073 | 201,162 | ||
Industrial and Miscellaneous [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale | $ 0 | $ 0 | ||
[1] Includes securities at December 31, 2022 with a carrying amount of $ 24.3 million that were pledged as collateral for the advance agreement entered into with a financial institution in 2018. The Company is permitted to withdraw or exchange any portion of the pledged collateral over the minimum requirement at any time. The Company’s unrealized losses on corporate bonds have not been recognized because the bonds are of a high credit quality with investment grade ratings. The decline in fair value is deemed to be caused by rising interest rates resulting in no credit loss allowance recorded for the year ended December 31, 2022. Includes securities at December 31, 2021 with a carrying amount of $ 22.5 million that were pledged as collateral for the advance agreement entered into with a financial institution in 2018. The Company is permitted to withdraw or exchange any portion of the pledged collateral over the minimum requirement at any time. |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets Measured at Estimated Fair Value on Nonrecurring Basis (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other Investments, Carrying Value Balance | $ 23,929,000 | ||
Other Investments, Amounts impaired | 0 | $ 2,200,000 | |
Other Investments, Carrying Value Balance | 16,484,000 | 23,929,000 | |
Nonrecurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other Investments, Carrying Value Balance | 91,959,000 | 152,459,000 | |
Other Investments, Amounts impaired | (91,959,000) | (60,500,000) | |
Other Investments, Carrying Value Balance | 0 | 91,959,000 | |
Nonrecurring [Member] | Goodwill [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other Investments, Carrying Value Balance | [1] | 91,959,000 | 152,459,000 |
Other Investments, Amounts impaired | [1] | (91,959,000) | (60,500,000) |
Other Investments, Carrying Value Balance | [1] | $ 0 | $ 91,959,000 |
[1] Non-cash impairment charge recorded in operating expenses in the consolidated statement of operations by the legal entity or related holding companies acquired. Goodwill that is impaired and subject to nonrecurring fair value measurements is a Level 3 valuation. |
Other Comprehensive Income - Su
Other Comprehensive Income - Summary of Other Comprehensive (loss) income and Tax Impact of Each Component of Other Comprehensive (loss) income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Other comprehensive (loss) income | |||
Change in unrealized gains on investments, net, Pre-tax | $ (64,335) | $ (13,661) | $ 20,738 |
Reclassification adjustment of realized (gains) losses included in net (loss) income, Pre-tax | 258 | (64) | (22,395) |
Effect on other comprehensive (loss) income, Pre-tax | (64,077) | (13,725) | (1,657) |
Change in unrealized gains on investments, net, Tax | 15,126 | 3,081 | (4,807) |
Reclassification adjustment of realized (gains) losses included in net (loss) income, Tax | (61) | 14 | 5,191 |
Effect on other comprehensive (loss) income, Tax | 15,065 | 3,095 | 384 |
Change in unrealized gains on investments, net, After-tax | (49,209) | (10,580) | 15,931 |
Reclassification adjustment of realized (gains) losses included in net (loss) income | 197 | (50) | (17,204) |
Effect on other comprehensive (loss) income, After-tax | $ (49,012) | $ (10,630) | $ (1,273) |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Other amounts receivable | $ 1,363 | $ 1,934 |
State underwriting pooling and associations | 4,697 | 3,956 |
Prepaid expense | 4,694 | 6,382 |
Unallocated Remittances | 755 | 0 |
Total other assets | $ 11,509 | $ 12,272 |
Leases - Additional Information
Leases - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2022 | |
Lessee Lease Description [Line Items] | |
Lease renewal, Description | one or more options to renew |
Minimum [Member] | |
Lessee Lease Description [Line Items] | |
Lease terms | 1 year |
Renewal terms of lease | 2 years |
Maximum [Member] | |
Lessee Lease Description [Line Items] | |
Lease terms | 10 years |
Renewal terms of lease | 10 years |
Leases - Components of Lease Co
Leases - Components of Lease Costs (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | ||
Total finance lease cost | $ 3,568 | $ 2,754 |
General and Administrative Expenses [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease cost (cost resulting from lease payments) | 1,449 | 1,359 |
Amortization of assets | 2,591 | 1,969 |
Variable lease cost | 952 | 542 |
Short-Term Lease, Cost | 188 | 106 |
Interest Expense [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Interest on lease liabilities | $ 977 | $ 785 |
Leases - Right-of-Use Lease Ass
Leases - Right-of-Use Lease Asset and Lease Liability (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Right-of-use lease asset, operating | $ 7,335 | $ 5,035 |
Right-of-use lease asset, finance | 20,132 | 22,718 |
Lease liability, operating | 8,690 | 6,551 |
Lease liability, finance | $ 22,557 | $ 24,621 |
Leases - Weighted-Average Remai
Leases - Weighted-Average Remaining Lease Term and Discount Rate for Operating and Financing Leases (Detail) | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Weighted average lease term - Operating leases | 6 years 5 months 26 days | 9 years 1 month 6 days |
Weighted average lease term - Finance leases | 8 years 1 month 17 days | 6 years 2 months 23 days |
Weighted average discount rate - Operating leases | 5.14% | 5.33% |
Weighted average discount rate - Finance leases | 4.16% | 4.18% |
Leases - Supplemental Disclosur
Leases - Supplemental Disclosure of Cash Flow Information Related to Leases (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Finance lease - Operating cash flows | $ 975 | $ 291 |
Finance lease - Financing cash flows | 2,063 | 599 |
Operating lease - Operating cash flows (fixed payments) | 1,610 | 1,505 |
Operating lease - Operating cash flows (liability reduction) | $ 1,251 | $ 1,133 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities for Financing and Operating Leases (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Financing Lease | ||
2023 | $ 3,085 | |
2024 | 3,101 | |
2025 | 3,166 | |
2026 | 3,197 | |
2027 | 3,190 | |
2028 and thereafter | 10,920 | |
Total lease payments | 26,659 | |
Less: imputed interest | (4,102) | |
Present value of lease liabilities | 22,557 | $ 24,621 |
Operating Lease | ||
2023 | 1,593 | |
2024 | 1,572 | |
2025 | 1,462 | |
2026 | 1,469 | |
2027 | 1,504 | |
2028 and thereafter | 2,639 | |
Total lease payments | 10,239 | |
Less: imputed interest | (1,549) | |
Present value of lease liabilities | $ 8,690 | $ 6,551 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment, Net (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total, at cost | $ 40,376 | $ 30,257 |
Less: accumulated depreciation and amortization | (14,647) | (12,831) |
Property and equipment, net | 25,729 | 17,426 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total, at cost | 2,582 | 2,582 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total, at cost | 9,599 | 10,141 |
Software in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total, at cost | 6,884 | 0 |
Computer Hardware and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total, at cost | 8,851 | 7,204 |
Office Furniture and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total, at cost | 1,381 | 1,355 |
Tenant and Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total, at cost | 10,485 | 8,255 |
Vehicle Fleet [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total, at cost | $ 594 | $ 720 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 USD ($) ft² a Building | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Property Plant And Equipment Useful Life And Values [Abstract] | |||
Investment in software development and implementation | $ 6.9 | ||
Depreciation and amortization expense | $ 2 | $ 2.1 | $ 1.6 |
Number of acres of land purchased | a | 13 | ||
Number of buildings | Building | 2 | ||
Gross area of acquired property | ft² | 88,378 |
Property and Equipment - Sche_2
Property and Equipment - Schedule of Expected Annual Rental Income Due Under Non-Cancellable Operating Leases for Real Estate Properties (Detail) $ in Thousands | Dec. 31, 2022 USD ($) |
Property, Plant and Equipment [Abstract] | |
2023 | $ 3,000 |
2024 | 2,751 |
2025 | 2,466 |
2026 | 2,518 |
2027 | 2,569 |
2028 and Thereafter | 14,571 |
Total | $ 27,874 |
Deferred Reinsurance Ceding C_3
Deferred Reinsurance Ceding Commission - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Policy Acquisition Costs [Member] | |||
Deferred Reinsurance Ceding Commission [Line Items] | |||
Deferred reinsurance ceding commissions, percentage | 75% | ||
Ceding commission income | $ 46.5 | $ 47.1 | $ 43 |
General and Administrative Expenses [Member] | |||
Deferred Reinsurance Ceding Commission [Line Items] | |||
Deferred reinsurance ceding commissions, percentage | 25% | ||
Ceding commission income | $ 15.4 | $ 15.6 | $ 14.1 |
Deferred Reinsurance Ceding C_4
Deferred Reinsurance Ceding Commission - Schedule of Activity with Regard to Deferred Reinsurance Ceding Commission (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Insurance [Abstract] | |||
Beginning balance of deferred ceding commission income | $ 40,405 | $ 39,995 | $ 37,464 |
Ceding commission deferred | 64,201 | 63,131 | 59,664 |
Less: ceding commission earned | (61,848) | (62,721) | (57,134) |
Ending balance of deferred ceding commission income | $ 42,757 | $ 40,405 | $ 39,995 |
Deferred Policy Acquisition C_3
Deferred Policy Acquisition Costs - Summary of Activity in Deferred Policy Acquisition Costs (DPAC) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Insurance [Abstract] | |||
Beginning Balance | $ 93,881 | $ 89,265 | $ 77,211 |
Policy acquisition costs deferred | 202,793 | 193,106 | 171,275 |
Amortization | (197,057) | (188,490) | (159,220) |
Ending Balance | $ 99,617 | $ 93,881 | $ 89,265 |
Reinsurance - 2022-2023 Reinsur
Reinsurance - 2022-2023 Reinsurance Tower - Catastrophe Excess of Loss Reinsurance - Segmented into Layers of Coverage - FL 1st Event - (Detail) - Heritage [Member] - First Catastrophe $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Layer 4 FL/SE 100% of $100M xs $550M 1@100% [Member] | |
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | |
Reinsured risk percentage | 100% |
Retention amount reinsured | $ 100,000 |
Excess retention amount reinsured | $ 550,000 |
Excess retention percentage | 100% |
Layer 4 FL/SE 100% of $100M xs $550M 1@100% [Member] | Maximum [Member] | |
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | |
Retention under program to provide reinsurance coverage | $ 1,220,300 |
Layer 4 FL/SE 100% of $100M xs $550M 1@100% [Member] | Minimum [Member] | |
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | |
Retention under program to provide reinsurance coverage | $ 1,120,300 |
Layer 3 100% of $160M xs $390M 1@100% [Member] | |
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | |
Reinsured risk percentage | 100% |
Retention amount reinsured | $ 160,000 |
Excess retention amount reinsured | $ 390,000 |
Excess retention percentage | 100% |
FHCF Layer 90% of $633.7M xs $276.9M ($570.3M) [Member] | |
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | |
Retention under program to provide reinsurance coverage | $ 910,600 |
Reinsured risk percentage | 90% |
Retention amount reinsured | $ 633,700 |
Excess retention amount reinsured | 276,900 |
Additional excess retention amount reinsured | 570,300 |
FHCF Layer 90% of $633.7M xs $276.9M ($570.3M) [Member] | Maximum [Member] | |
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | |
Retention under program to provide reinsurance coverage | 960,300 |
FHCF Layer 90% of $633.7M xs $276.9M ($570.3M) [Member] | Minimum [Member] | |
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | |
Retention under program to provide reinsurance coverage | $ 276,900 |
Layer 2 100% of $250M xs $140M 1@100% [Member] | |
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | |
Reinsured risk percentage | 100% |
Retention amount reinsured | $ 250,000 |
Excess retention amount reinsured | $ 140 |
Excess retention percentage | 100% |
Layer One Reinstatement Premium Protection Cover [Member] | |
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | |
Retention under program to provide reinsurance coverage | $ 140,000 |
Reinsured risk percentage | 100% |
Retention amount reinsured | $ 100,000 |
Excess retention amount reinsured | $ 40,000 |
Excess retention percentage | 100% |
Retention [Member] | |
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | |
Retention under program to provide reinsurance coverage | $ 40,000 |
Reinsurance retention policy, description | Retention |
Reinsurance - 2022-2023 Reins_2
Reinsurance - 2022-2023 Reinsurance Tower - Catastrophe Excess of Loss Reinsurance - Segmented into Layers of Coverage - NE 1st Event - (Detail) - NBIC [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||
Excess retention amount reinsured | $ 21 | $ 20 |
Northeast Only 72.97% of $370M xs $850M 1@100% [Member] | First Catastrophe | ||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||
Retention under program to provide reinsurance coverage | $ 1,220 | |
Reinsured risk percentage | 72.97% | |
Retention amount reinsured | $ 370 | |
Excess retention amount reinsured | $ 85 | |
Excess retention percentage | 100% | |
Northeast Only Bond 27.03% of $370M xs $850M [Member] | First Catastrophe | ||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||
Reinsured risk percentage | 27.03% | |
Retention amount reinsured | $ 370 | |
Excess retention amount reinsured | 850 | |
Multi-Zonal 100% of $300M xs Mix 1@100% [Member] | First Catastrophe | ||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||
Retention under program to provide reinsurance coverage | $ 850 | |
Reinsured risk percentage | 100% | |
Retention amount reinsured | $ 300 | |
Excess retention amount reinsured | $ 550 | |
Excess retention percentage | 100% | |
Layer 3 100% of $160M xs $390M 1@100% [Member] | First Catastrophe | ||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||
Retention under program to provide reinsurance coverage | $ 550 | |
Reinsured risk percentage | 100% | |
Retention amount reinsured | $ 160 | |
Excess retention amount reinsured | $ 39 | |
Excess retention percentage | 100% | |
Layer 2 100% of $250M xs $140M 1@100% [Member] | First Catastrophe | ||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||
Retention under program to provide reinsurance coverage | $ 390 | |
Reinsured risk percentage | 100% | |
Retention amount reinsured | $ 250 | |
Excess retention amount reinsured | $ 140 | |
Excess retention percentage | 100% | |
Layer 1 100% of $100M xs $40M 1@100% [Member] | First Catastrophe | ||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||
Retention under program to provide reinsurance coverage | $ 140 | |
Reinsured risk percentage | 100% | |
Retention amount reinsured | $ 100 | |
Excess retention amount reinsured | $ 40 | |
Excess retention percentage | 100% | |
Top and Agg Net Quota Share [Member] | First Catastrophe | ||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||
Reinsured risk percentage | 50% | |
Retention amount reinsured | $ 20 | |
Retention [Member] | First Catastrophe | ||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||
Reinsurance retention policy, description | Retention | |
Retention [Member] | First Catastrophe | Maximum [Member] | ||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||
Retention under program to provide reinsurance coverage | $ 40 | |
Retention [Member] | First Catastrophe | Minimum [Member] | ||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||
Retention under program to provide reinsurance coverage | $ 20 |
Reinsurance - 2022-2023 Reins_3
Reinsurance - 2022-2023 Reinsurance Tower - Catastrophe Excess of Loss Reinsurance - Segmented into Layers of Coverage - HI 1st Event - (Detail) - Zephyr [Member] - First Catastrophe [Member] $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
HI Only 100% of $90M xs $690M 1@100% [Member] | |
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | |
Retention under program to provide reinsurance coverage | $ 780 |
Reinsured risk percentage | 100% |
Retention amount reinsured | $ 90 |
Excess retention amount reinsured | $ 690 |
Excess retention percentage | 100% |
Multi-Zonal 100% of $300M xs Mix 1@100% [Member] | |
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | |
Retention under program to provide reinsurance coverage | $ 690 |
Reinsured risk percentage | 100% |
Retention amount reinsured | $ 300 |
Excess retention amount reinsured | $ 390 |
Excess retention percentage | 100% |
Layer 2 100% of $250M xs $140M 1@100% [Member] | |
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | |
Retention under program to provide reinsurance coverage | $ 390 |
Reinsured risk percentage | 100% |
Retention amount reinsured | $ 250 |
Excess retention amount reinsured | $ 140 |
Excess retention percentage | 100% |
Layer 1 100% of $100M xs $40M 1@100% [Member] | |
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | |
Retention under program to provide reinsurance coverage | $ 140 |
Reinsured risk percentage | 100% |
Retention amount reinsured | $ 100 |
Excess retention amount reinsured | $ 40 |
Excess retention percentage | 100% |
Retention [Member] | |
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | |
Retention under program to provide reinsurance coverage | $ 40 |
Reinsurance retention policy, description | Retention |
Reinsurance - 2022-2023 Reins_4
Reinsurance - 2022-2023 Reinsurance Program - Catastrophe Excess of Loss Reinsurance - Additional information - (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||
Reinsurance payable | $ 199,803 | $ 191,728 |
FHCF [Member] | ||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||
Reinsured risk percentage | 90% | |
2022-2023 Reinsurance Program [Member] | ||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||
Reinsurance purchase limit | $ 3,200,000 | |
First Catastrophe [Member] | 2022-2023 Reinsurance Program [Member] | NBIC [Member] | Maximum [Member] | ||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||
Retention under program to provide reinsurance coverage | 1,200,000 | |
First event retention for insurance company subsidiary | 30,000 | |
First Catastrophe [Member] | 2022-2023 Reinsurance Program [Member] | Heritage [Member] | Maximum [Member] | ||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||
Retention under program to provide reinsurance coverage | 1,200,000 | |
First event retention for insurance company subsidiary | 40,000 | |
First Catastrophe [Member] | 2022-2023 Reinsurance Program [Member] | Zephyr [Member] | Maximum [Member] | ||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||
Retention under program to provide reinsurance coverage | 780,000 | |
First event retention for insurance company subsidiary | 40,000 | |
First Catastrophe [Member] | 2022-2023 Reinsurance Program [Member] | Osprey And Zephyr [Member] | Maximum [Member] | ||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||
First event retention for insurance company subsidiary | 30,000 | |
First Catastrophe [Member] | 2022-2023 Reinsurance Program [Member] | Osprey And NBIC [Member] | Maximum [Member] | ||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||
First event retention for insurance company subsidiary | 30,000 | |
Osprey [Member] | First Catastrophe [Member] | 2022-2023 Reinsurance Program [Member] | Maximum [Member] | ||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||
First event retention for insurance company subsidiary | $ 35,000 |
Reinsurance - 2022-2023 Reins_5
Reinsurance - 2022-2023 Reinsurance Program - Gross Quota and Net Quota Share Reinsurance - Additional information - (Detail) - NBIC [Member] - 2022-2023 Net Quota Share Reinsurance [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||
Net lines quota share occurrence limit | $ 20 | |
Percentage of renewed ceded net premium and losses | 41% | 16% |
Reinsurance - 2022-2023 Reins_6
Reinsurance - 2022-2023 Reinsurance Program - Aggregate Coverage - Additional information - (Detail) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 USD ($) Reinsurer | Dec. 31, 2021 USD ($) Reinsurer | |
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||
Number of reinstatements available | Reinsurer | 2 | |
NBIC [Member] | ||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||
Aggregate contract coverage limit | $ 20 | $ 20 |
Excess retention amount reinsured | 21 | $ 20 |
Occurrence cap amount | 21 | |
Franchise deductible amount | $ 2 | |
Aggregate contract expiration date | Mar. 31, 2023 | Dec. 31, 2022 |
Number of reinstatements available | Reinsurer | 1 |
Reinsurance - 2022-2023 Reins_7
Reinsurance - 2022-2023 Reinsurance Program - Additional information (Detail) | 12 Months Ended | |||
Dec. 31, 2022 USD ($) Reinsurer | Dec. 31, 2021 USD ($) Reinsurer | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | |
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||||
Unpaid losses and loss adjustment expenses | $ 1,131,807,000 | $ 590,166,000 | $ 659,341,000 | $ 613,533,000 |
Reinsurance payable | $ 199,803,000 | $ 191,728,000 | ||
Number of reinstatements available | Reinsurer | 2 | |||
Property Losses [Member] | ||||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||||
Retention under program to provide reinsurance coverage | $ 2,750,000 | |||
Excess retention amount reinsured | 750,000 | |||
Causality Losses [Member] | ||||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||||
Retention under program to provide reinsurance coverage | 1,250,000 | |||
Excess retention amount reinsured | 750,000 | |||
Facultative Reinsurance [Member] | Maximum [Member] | ||||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||||
Reinsurance payable | 10,000,000 | |||
Facultative Reinsurance [Member] | Minimum [Member] | ||||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||||
Facultative reinsurance purchase amount | 10,000,000 | |||
NBIC [Member] | ||||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||||
Number of reinstatements available | Reinsurer | 1 | |||
Excess retention amount reinsured | 21,000,000 | $ 20,000,000 | ||
NBIC [Member] | Facultative 2022 - 2023 Excess of Loss Reinsurance Program [Member] | Minimum [Member] | ||||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||||
Reinsurance payable | $ 3,500,000 | |||
Commercial Residential Losses [Member] | NBIC [Member] | ||||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||||
Number of reinstatements available | Reinsurer | 2 | |||
Insurance Claims [Member] | ||||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||||
Unpaid losses and loss adjustment expenses | $ 1,000,000 | |||
Insurance Claims [Member] | Commercial Residential Losses [Member] | NBIC [Member] | ||||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||||
Unpaid losses and loss adjustment expenses | 750,000 | |||
Property Per Risk Coverage [Member] | ||||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||||
Coverage limit | 9,000,000 | |||
Reinsurance payable | 27,000,000 | |||
Property Per Risk Coverage [Member] | Commercial Residential Losses [Member] | NBIC [Member] | ||||
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items] | ||||
Coverage limit | 250,000 | |||
Reinsurance payable | $ 750,000 |
Reinsurance - Schedule of Effec
Reinsurance - Schedule of Effect of Reinsurance Arrangements in Consolidated Statement of Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Premiums Written | |||||||||||
Premiums Written, Direct | $ 1,275,031 | $ 1,164,879 | $ 1,080,100 | ||||||||
Premiums Written, Ceded | (612,863) | (553,147) | (473,836) | ||||||||
Premiums Written, Net | 662,168 | 611,732 | 606,264 | ||||||||
Premiums Earned | |||||||||||
Premiums Earned, Direct | 1,208,824 | 1,144,162 | 996,842 | ||||||||
Premiums Earned, Ceded | (571,759) | (533,091) | (452,120) | ||||||||
Net premiums earned | $ 166,171 | $ 159,693 | $ 158,271 | $ 152,929 | $ 159,928 | $ 162,445 | $ 146,499 | $ 142,199 | 637,065 | 611,071 | 544,722 |
Losses and Loss Adjustment Expenses | |||||||||||
Losses and Loss Adjustment Expenses, Direct | 1,318,001 | 625,748 | 609,593 | ||||||||
Losses and Loss Adjustment Expenses, Ceded | (816,839) | (198,378) | (236,206) | ||||||||
Losses and Loss Adjustment Expenses, Net | $ 501,162 | $ 427,370 | $ 373,387 |
Reserve for Unpaid Losses - Sum
Reserve for Unpaid Losses - Summary of Reserve for Unpaid Losses (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Insurance [Abstract] | |||
Balance, beginning of period | $ 590,166 | $ 659,341 | $ 613,533 |
Less: reinsurance recoverable on unpaid losses | 301,757 | 397,688 | 393,630 |
Net balance, beginning of period | 288,409 | 261,653 | 219,903 |
Incurred related to: | |||
Current year | 497,428 | 430,907 | 392,976 |
Prior years | 3,734 | (3,537) | (19,589) |
Total incurred | 501,162 | 427,370 | 373,387 |
Paid related to: | |||
Current year | 267,319 | 247,903 | 228,394 |
Prior years | 150,126 | 152,711 | 103,243 |
Total paid | 417,445 | 400,614 | 331,637 |
Net balance, end of period | 372,126 | 288,409 | 261,653 |
Plus: reinsurance recoverable on unpaid losses | 759,681 | 301,757 | 397,688 |
Balance, end of period | $ 1,131,807 | $ 590,166 | $ 659,341 |
Reserve for Unpaid Losses - Add
Reserve for Unpaid Losses - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Insurance [Abstract] | |||
Losses incurred adverse development | $ (3,700) | ||
Losses incurred favorable development | $ 3,734 | $ (3,537) | $ (19,589) |
Reserve for Unpaid Losses - S_2
Reserve for Unpaid Losses - Summary of Incurred Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance (Detail) $ in Thousands | Dec. 31, 2022 USD ($) Claim | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | Dec. 31, 2018 USD ($) | Dec. 31, 2017 USD ($) | Dec. 31, 2016 USD ($) | Dec. 31, 2015 USD ($) | Dec. 31, 2014 USD ($) | Dec. 31, 2013 USD ($) |
Claims Development [Line Items] | ||||||||||
Incurred Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance | $ 2,573,293 | |||||||||
Net IBNR Reserves | 272,951 | |||||||||
Accident Year 2013 And Prior [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance | 169,542 | $ 169,318 | $ 169,266 | $ 169,192 | $ 168,824 | $ 169,008 | $ 168,497 | $ 169,462 | $ 169,325 | $ 166,922 |
Net IBNR Reserves | $ 48 | |||||||||
Reported Claims | Claim | 66,479 | |||||||||
Accident Year 2014 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance | $ 115,572 | 115,708 | 115,409 | 115,234 | 115,838 | 114,984 | 113,847 | 114,899 | $ 118,991 | |
Net IBNR Reserves | $ 103 | |||||||||
Reported Claims | Claim | 18,506 | |||||||||
Accident Year 2015 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance | $ 204,944 | 204,961 | 205,437 | 206,011 | 205,164 | 203,792 | 197,744 | $ 179,255 | ||
Net IBNR Reserves | $ 526 | |||||||||
Reported Claims | Claim | 26,130 | |||||||||
Accident Year 2016 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance | $ 249,315 | 250,482 | 250,067 | 250,235 | 250,990 | 242,611 | $ 237,207 | |||
Net IBNR Reserves | $ 1,482 | |||||||||
Reported Claims | Claim | 27,633 | |||||||||
Accident Year 2017 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance | $ 211,386 | 195,602 | 194,618 | 192,749 | 195,240 | $ 189,163 | ||||
Net IBNR Reserves | $ 15,657 | |||||||||
Reported Claims | Claim | 73,350 | |||||||||
Accident Year 2018 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance | $ 207,569 | 198,064 | 192,474 | 193,672 | $ 199,565 | |||||
Net IBNR Reserves | $ 4,155 | |||||||||
Reported Claims | Claim | 34,481 | |||||||||
Accident Year 2019 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance | $ 237,250 | 230,691 | 231,545 | $ 258,876 | ||||||
Net IBNR Reserves | $ 8,878 | |||||||||
Reported Claims | Claim | 26,362 | |||||||||
Accident Year 2020 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance | $ 372,212 | 362,108 | $ 370,058 | |||||||
Net IBNR Reserves | $ 25,904 | |||||||||
Reported Claims | Claim | 39,812 | |||||||||
Accident Year 2021 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance | $ 357,677 | $ 388,949 | ||||||||
Net IBNR Reserves | $ 43,281 | |||||||||
Reported Claims | Claim | 33,015 | |||||||||
Accident Year 2022 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance | $ 447,827 | |||||||||
Net IBNR Reserves | $ 172,917 | |||||||||
Reported Claims | Claim | 38,117 |
Reserve for Unpaid Losses - S_3
Reserve for Unpaid Losses - Summary of Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Claims Development [Line Items] | ||||||||||
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | $ 2,213,447 | |||||||||
Accident Year 2013 And Prior [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | 169,452 | $ 169,084 | $ 168,924 | $ 167,666 | $ 166,456 | $ 164,448 | $ 162,009 | $ 159,682 | $ 153,466 | $ 137,094 |
Accident Year 2014 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | 115,179 | 114,898 | 113,975 | 113,609 | 112,518 | 108,509 | 101,456 | 95,076 | $ 68,732 | |
Accident Year 2015 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | 202,848 | 201,495 | 199,600 | 197,524 | 192,967 | 181,672 | 162,654 | $ 103,918 | ||
Accident Year 2016 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | 246,826 | 244,820 | 241,875 | 238,868 | 233,540 | 211,512 | $ 132,679 | |||
Accident Year 2017 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | 194,079 | 188,928 | 184,313 | 178,622 | 169,743 | $ 103,148 | ||||
Accident Year 2018 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | 199,007 | 187,386 | 170,301 | 152,592 | $ 84,552 | |||||
Accident Year 2019 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | 222,246 | 207,714 | 185,667 | $ 124,664 | ||||||
Accident Year 2020 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | 336,574 | 311,539 | $ 210,548 | |||||||
Accident Year 2021 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | 300,731 | $ 213,830 | ||||||||
Accident Year 2022 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | $ 226,505 |
Reserve for Unpaid Losses - S_4
Reserve for Unpaid Losses - Summary of Reconciliation of Reserve Balances to Liability for Unpaid Loss and Loss Adjustment Expenses (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Insurance [Abstract] | ||||
Unpaid Loss and Allocated Loss Adjustment Expense, Net of Reinsurance | $ 359,846 | |||
Reinsurance recoverable on unpaid losses | 759,681 | $ 301,757 | $ 397,688 | $ 393,630 |
Unpaid Unallocated Loss Adjustment Expense | 12,280 | |||
Unpaid losses and loss adjustment expenses | $ 1,131,807 | $ 590,166 | $ 659,341 | $ 613,533 |
Reserve for Unpaid Losses - S_5
Reserve for Unpaid Losses - Summary of Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Detail) | Dec. 31, 2022 |
Insurance [Abstract] | |
Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance Year - 1 | 55% |
Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance Year - 2 | 29% |
Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance Year - 3 | 7% |
Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance Year - 4 | 4% |
Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance Year - 5 | 2% |
Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance Thereafter | 3% |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||||
Dec. 23, 2022 | Nov. 07, 2022 | Aug. 01, 2022 | Dec. 31, 2018 | Oct. 31, 2017 | Jun. 30, 2025 | Dec. 31, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Oct. 30, 2022 | Jul. 31, 2022 | Jul. 29, 2022 | Jan. 31, 2022 | Sep. 30, 2017 | Aug. 31, 2017 | |
Debt Instrument [Line Items] | ||||||||||||||||||
Long-term debt, net | $ 128,943,000 | $ 120,757,000 | ||||||||||||||||
Debt Instrument, annual principal payment | $ 10,900,000 | |||||||||||||||||
Debt instrument, periodic payment, interest | 320,041 | |||||||||||||||||
Payout dividends, aggregate amount | $ 4,770,000 | 6,709,000 | $ 6,852,000 | |||||||||||||||
Interest rate terms | borrowings under the Credit Facilities bear interest at rates equal to either (1) a rate determined by reference to SOFR, plus an applicable margin and a credit adjustment spread equal to 0.10% or (2) a base rate determined by reference to the highest of (a) the “prime rate” of Regions Bank, (b) the federal funds rate plus 0.50%, and (c) the adjusted term SOFR in effect on such day for an interest period of one month plus 1.00%, plus an applicable margin. | |||||||||||||||||
Unamortized issuance and debt discount costs | $ 242,700 | |||||||||||||||||
Repurchase of convertible notes | $ 22,529,000 | 0 | 0 | |||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Consolidated leverage ratio | 2% | 2.25% | 2.50% | |||||||||||||||
Federal Home Loan Bank Of Atlanta [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Notes maturity date | Dec. 13, 2023 | |||||||||||||||||
Interest paid | 601,000 | 604,000 | ||||||||||||||||
FHLB advance Interest rate | 3.094% | |||||||||||||||||
Cash loan received under advance from FHLB | $ 19,200,000 | |||||||||||||||||
Required fair value of reinvestment in FHLB common stock. | $ 1,400,000 | 1,500,000 | 1,400,000 | |||||||||||||||
Estimated fair value of collateral with FHLB | 24,200,000 | |||||||||||||||||
Federal Home Loan Bank Des Moines [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Interest paid | 319,100 | 215,900 | ||||||||||||||||
Seventh Amendment [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Credit agreement amendment description | Consolidated Tangible Net Worth (as defined in the Credit Agreement) which is required to be not less than $100 million plus 50% of positive quarterly net income (including its subsidiaries and regulated subsidiaries) plus the net cash proceeds of any equity transactions and (ii) Consolidated Fixed Charge Ratio (as defined in the Credit Agreement) which is required to be 1.20x | |||||||||||||||||
Payout dividends, aggregate amount | $ 10,000,000 | $ 2,000,000 | ||||||||||||||||
Consolidated leverage ratio | 1.20% | |||||||||||||||||
Due from related parties | $ 38,000,000 | |||||||||||||||||
Seventh Amendment [Member] | Minimum [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Maximum borrowing capacity | $ 100,000,000 | |||||||||||||||||
Heritage Insurance Holdings, Inc. [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Payout dividends, aggregate amount | 3,208,000 | 6,673,000 | 6,772,000 | |||||||||||||||
Repurchase of convertible notes | $ 22,529,000 | 0 | 0 | |||||||||||||||
Heritage Insurance Holdings, Inc. [Member] | Convertible Note [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Repurchase of convertible notes | $ 11,700,000 | |||||||||||||||||
Revolving Credit Facility [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Outstanding borrowing capacity amount | 10,000,000 | |||||||||||||||||
Repurchase of convertible notes | $ 10,900,000 | |||||||||||||||||
Term Loan Facility [Member] | Seventh Amendment [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Amortization of financing costs percentage | 10% | |||||||||||||||||
Convertible Senior Notes [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Aggregate principal amount | $ 136,800,000 | |||||||||||||||||
Interest rate | 5.875% | 5.875% | ||||||||||||||||
Notes maturity date | Aug. 01, 2037 | |||||||||||||||||
Interest payments term | Interest is payable semi-annually in arrears, on February 1, and August 1 of each year. | |||||||||||||||||
Long-term debt, net | $ 885,000 | 22,900,000 | 22,100,000 | |||||||||||||||
Issuance and debt discount costs | 506,000 | 1,300,000 | ||||||||||||||||
Interest paid | 1,400,000 | 1,400,000 | 1,400,000 | |||||||||||||||
Convertible Senior Notes [Member] | Subsidiary [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Repurchase of convertible notes | $ 21,100,000 | 21,100,000 | $ 21,100,000 | |||||||||||||||
Senior Secured Credit Facility [Member] | Credit Agreement Fifth Amendment [Member] | Maximum [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Credit agreement loans margin percentage | 3.25% | |||||||||||||||||
Senior Secured Credit Facility [Member] | Credit Agreement Fifth Amendment [Member] | Minimum [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Credit agreement loans margin percentage | 2.50% | |||||||||||||||||
Senior Secured Credit Facility [Member] | Seventh Amendment [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Debt instrument, basis spread on variable rate | 0.10% | |||||||||||||||||
Leverage ratio description | require additional leverage ratios under the Consolidated Leverage Ratio covenant (as defined in the Credit Agreement) after the initial step down to 2.50x in the second quarter of 2023 not to exceed 2.25x as of the second quarter of 2024 and 2.00x as of the second quarter of 2025 | |||||||||||||||||
Senior Secured Credit Facility [Member] | Seventh Amendment [Member] | Maximum [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Credit agreement loans margin percentage | 3% | |||||||||||||||||
Senior Secured Credit Facility [Member] | Seventh Amendment [Member] | Minimum [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Credit agreement loans margin percentage | 2.75% | |||||||||||||||||
Senior Secured Credit Facility [Member] | Seventh Amendment [Member] | Federal Funds Rate [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Debt instrument, basis spread on variable rate | 0.50% | |||||||||||||||||
Senior Secured Credit Facility [Member] | Seventh Amendment [Member] | Secured Overnight Financing Rate SOFR [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Debt instrument, basis spread on variable rate | 1% | |||||||||||||||||
Senior Secured Credit Facility [Member] | Revolving Credit Facility [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Notes maturity date | Jan. 31, 2023 | |||||||||||||||||
Maximum borrowing capacity | $ 75,000,000 | |||||||||||||||||
Outstanding borrowing capacity amount | $ 10,000,000 | |||||||||||||||||
Letters of credit outstanding amount | 32,600,000 | $ 22,600,000 | ||||||||||||||||
Revolving credit facility, outstanding principal amount | $ 10,000,000 | |||||||||||||||||
Letters of credit remaining amount | $ 10,000,000 | |||||||||||||||||
Effective interest rate | 7.423% | |||||||||||||||||
Senior Secured Credit Facility [Member] | Revolving Credit Facility [Member] | Seventh Amendment [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Aggregate principal amount | 10,000,000 | |||||||||||||||||
Notes maturity period | 5 years | |||||||||||||||||
Maximum borrowing capacity | 50,000,000 | $ 50,000,000 | ||||||||||||||||
Outstanding borrowing capacity amount | 10,000,000 | |||||||||||||||||
Letters of credit outstanding amount | 31,800,000 | |||||||||||||||||
Senior Secured Credit Facility [Member] | Term Loan Facility [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Principal payments | 5,000,000 | 4,700,000 | ||||||||||||||||
Interest paid | $ 2,300,000 | 2,000,000 | ||||||||||||||||
Effective interest rate | 7.317% | |||||||||||||||||
Senior Secured Credit Facility [Member] | Term Loan Facility [Member] | Seventh Amendment [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Aggregate principal amount | $ 89,100,000 | |||||||||||||||||
Notes maturity date | Jul. 28, 2026 | |||||||||||||||||
Notes maturity period | 5 years | |||||||||||||||||
Maximum borrowing capacity | 25,000,000 | $ 100,000,000 | ||||||||||||||||
Senior Secured Credit Facility [Member] | Term Loan Facility [Member] | Term Loan Payable Which Began with Close of Fiscal Quarter Ending March 31, 2019 [Member] | Seventh Amendment [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Principal payments | 1,900,000 | |||||||||||||||||
Senior Secured Credit Facility [Member] | Term Loan Facility [Member] | Term Loan Payable Commencing with Quarter Ending December 31, 2021 [Member] | Seventh Amendment [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Principal payments | 875,000 | |||||||||||||||||
Senior Secured Credit Facility [Member] | Term Loan Facility [Member] | Term Loan Payable Commencing with Quarter Ending December 31, 2024 [Member] | Seventh Amendment [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Principal payments | 2,400,000 | |||||||||||||||||
Senior Secured Credit Facility [Member] | Swingline Loan [Member] | Seventh Amendment [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Maximum borrowing capacity | $ 25,000,000 | |||||||||||||||||
Senior Secured Credit Facility [Member] | Line of Credit [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Maximum potential increase on credit facility | 50,000,000 | |||||||||||||||||
Senior Secured Credit Facility [Member] | Line of Credit [Member] | Seventh Amendment [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Maximum potential increase on credit facility | $ 25,000,000 | |||||||||||||||||
Five Point Eight Seven Five Percent Convertible Senior Notes Due Two Thousand Thirty Seven [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Aggregate principal amount | $ 10,900,000 | |||||||||||||||||
Long-term debt, net | $ 11,800,000 | |||||||||||||||||
Collateral Financial Arrangement [Member] | Skye Lane Properties LLC [Member] | Mortgage Loan [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Aggregate principal amount | $ 12,700,000 | |||||||||||||||||
Interest rate | 4.95% | |||||||||||||||||
Notes maturity date | Oct. 30, 2027 | |||||||||||||||||
Frequency of periodic principal and interest payments | monthly | |||||||||||||||||
Payment of principal and interest | $ 892,850 | $ 892,850 | ||||||||||||||||
Collateral Financial Arrangement [Member] | Skye Lane Properties LLC [Member] | Mortgage Loan [Member] | Maximum [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Interest rate | 7.42% | |||||||||||||||||
Collateral Financial Arrangement [Member] | Skye Lane Properties LLC [Member] | Mortgage Loan [Member] | Minimum [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Interest rate | 4.95% | |||||||||||||||||
Collateral Financial Arrangement [Member] | Skye Lane Properties LLC [Member] | Mortgage Loan [Member] | 5-year Treasury Security [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Debt instrument, basis spread on variable rate | 3.10% |
Long-Term Debt - Schedule of Co
Long-Term Debt - Schedule of Company's Long-Term Debt (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Principal amount | $ 130,409 | $ 123,259 |
Deferred finance costs | 1,466 | 2,502 |
Total long-term debt | 128,943 | 120,757 |
Credit Loan Facility [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount | 89,125 | 69,125 |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount | 10,000 | 0 |
Convertible Debt [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount | 885 | 23,413 |
FHLB Loan Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount | 19,200 | 19,200 |
Mortgage Loan [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 11,199 | $ 11,521 |
Long-Term Debt - Schedule of Pr
Long-Term Debt - Schedule of Principal Payments on Long-Term Debt (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
2023 | $ 29,039 | |
2024 | 9,854 | |
2025 | 9,874 | |
2026 | 71,018 | |
2027 | 414 | |
Thereafter | 10,210 | |
Total principal payments | $ 130,409 | $ 123,259 |
Income Taxes - Summary of Provi
Income Taxes - Summary of Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Federal: | |||
Current | $ (1,196) | $ 3,015 | $ (14,863) |
Deferred | (9,714) | (5,872) | 6,859 |
Benefit for Federal income tax | (10,910) | (2,857) | (8,004) |
State: | |||
Current | 592 | 1,634 | 1,501 |
Deferred | (1,489) | (84) | (610) |
(Benefit)/Provision for State income tax expense | (897) | 1,550 | 891 |
Benefit for income taxes | $ (11,807) | $ (1,307) | $ (7,113) |
Income Taxes - Summary of U.S.
Income Taxes - Summary of U.S. Federal Income Tax Rate to Pretax Income (Detail) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Expected income tax expense at federal rate | 21% | 21% | 21% |
State tax expense | 1% | (1.00%) | 25.90% |
Permanent items | (0.30%) | (0.50%) | 16% |
Goodwill impairment | (10.60%) | (16.70%) | 0% |
Non-deductible stock compensation | (0.10%) | (0.20%) | 22.40% |
Tax exempt interest | 0.10% | 0.10% | (18.40%) |
Executive compensation 162(m) | (0.20%) | (0.20%) | 20.30% |
Political contributions | 0% | (0.20%) | 6.20% |
Tax rate change | 0% | (0.50%) | (409.10%) |
Valuation allowance | (3.80%) | 0% | 0% |
Other | 0% | 0% | (5.60%) |
Reported income tax expense | 7.11% | 1.70% | (321.30%) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Aug. 16, 2022 | Mar. 27, 2020 | Jun. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | |
Income Tax [Line Items] | |||||
Non-deductable goodwill impairment | $ 92,000,000 | $ 60,500,000 | |||
Effective income tax rate, valuation allowance recognized | $ 6,400,000 | ||||
Percentage of corporate alternative minimum tax for adjusted income | 15% | ||||
Excise tax on corporate stock repurchases | 1% | ||||
Capital loss carryforward | 0 | ||||
Deferred tax assets valuation allowance | $ 0 | 6,376,000 | |||
Federal gross operating loss carryforward | 0 | ||||
State gross operating loss carryforward | 27,400,000 | ||||
Uncertain tax positions | $ 0 | ||||
CARES Act [Member] | |||||
Income Tax [Line Items] | |||||
Net operating loss carryback period | 5 years | ||||
Tax benefit from carrying back net operating losses | $ 7,100,000 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Unearned premiums | $ 17,060 | $ 15,805 |
Unearned commission | 10,053 | 9,459 |
Net operating loss | 1,189 | 1,222 |
Tax-related discount on loss reserve | 4,902 | 3,872 |
Stock-based compensation | 297 | 84 |
Accrued expenses | 1,016 | 1,182 |
Leases | 885 | 792 |
Unrealized losses | 16,987 | 1,913 |
Dual Consolidated loss limitation | 9,740 | 0 |
Other | 238 | 472 |
Total deferred tax asset | 62,367 | 34,801 |
Valuation allowance | (6,376) | 0 |
Adjusted deferred tax asset | 55,991 | 34,801 |
Deferred tax liabilities: | ||
Deferred acquisition costs | 23,420 | 21,977 |
Prepaid expenses | 180 | 177 |
Property and equipment | 2,200 | 1,504 |
Note discount | 290 | 187 |
Basis in purchased investments | 28 | 34 |
Basis in purchased intangibles | 11,178 | 14,550 |
Internal revenue code 481(a) | 0 | 4,416 |
Other | 1,854 | 1,382 |
Total deferred tax liabilities | 39,150 | 44,227 |
Net deferred tax assets (liabilities) | $ 16,841 | $ (9,426) |
Statutory Accounting and Regu_2
Statutory Accounting and Regulations - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statutory Accounting Practices [Line Items] | |||
Statutory net loss of insurance subsidiary | $ (33,300,000) | $ (38,300,000) | |
Dividends paid | $ 4,770,000 | 6,709,000 | $ 6,852,000 |
Date of incorporation | Apr. 23, 2013 | ||
Florida [Member] | Maximum [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Permitted dividend rate without prior approval of insurance regulatory authority | 10% | ||
Rhode Island [Member] | Maximum [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Permitted dividend rate without prior approval of insurance regulatory authority | 10% | ||
Hawaii [Member] | Maximum [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Permitted dividend rate without prior approval of insurance regulatory authority | 10% | ||
Heritage P&C [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Statutory accounting practices, capital and surplus requirements of insurance subsidiary | greater of $15 million or 10% of their respective liabilities. | ||
Minimum required amount of capital and surplus maintained by the insurance subsidiary | $ 15,000,000 | ||
Statutory capital and surplus requirements, percentage | 10% | ||
Zephyr | |||
Statutory Accounting Practices [Line Items] | |||
Deposits held | $ 750,000 | ||
Dividends paid | 4,300,000 | 6,800,000 | |
NBIC [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Statutory capital and surplus | 3,000,000 | ||
Heritage P&C, NBIC, and Zephyr [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Statutory capital and surplus | 276,300,000 | 302,100,000 | |
Heritage P&C and NBIC [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Dividends paid | $ 0 | $ 0 | $ 0 |
Accounts Payable and Other Li_3
Accounts Payable and Other Liabilities - Schedule of Accounts Payable and Other Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Other Liabilities Disclosure [Abstract] | ||
Deferred ceding commission | $ 42,758 | $ 40,406 |
Accounts payable and other payables | 17,660 | 10,086 |
Accrued dividends | 72 | 1,634 |
Accrued interest and issuance costs | 733 | 735 |
Other liabilities | 229 | 195 |
Premium tax | 1,001 | 871 |
Commission payables | 17,558 | 17,598 |
Total other liabilities | $ 80,010 | $ 71,525 |
Accrued Bonus Compensation - Ad
Accrued Bonus Compensation - Additional Information (Detail) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued Bonus Compensation [Line Items] | ||
Accrued employee's bonus compensation | $ 2.1 | $ 3.4 |
Accrued bonuses payable | $ 2 | $ 3 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Comegys Insurance Agency, Inc. [Member] | |||
Related Party Transaction [Line Items] | |||
Agency commission | $ 572,600 | $ 843,180 | $ 1,000 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Contribution for participating employees | $ 1,300,000 | $ 1,300,000 | $ 1,200,000 |
Defined Contribution Plan, Plan Name | 401(k) | ||
Medical cost | $ 4,900,000 | 3,500,000 | $ 4,100,000 |
Additional liability for unpaid claims | $ 221,386 | $ 422,800 | |
Maximum [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percentage of contribution on employee salary | 4% | ||
First 3% of Employees [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percentage of contribution on employee salary | 100% | ||
Next 2% of the Employees [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percentage of contribution on employee salary | 50% |
Equity - Additional Information
Equity - Additional Information (Detail) - USD ($) | 12 Months Ended | 17 Months Ended | |||||||||||
Dec. 15, 2022 | Aug. 03, 2022 | May 05, 2022 | Mar. 04, 2022 | Dec. 19, 2021 | Nov. 02, 2020 | Aug. 01, 2019 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2020 | Jan. 31, 2023 | Dec. 31, 2019 | |
Class Of Stock [Line Items] | |||||||||||||
Common stock, shares authorized | 50,000,000 | 50,000,000 | |||||||||||
Preferred stock, shares authorized | 5,000,000 | ||||||||||||
Common stock, shares outstanding | 25,539,433 | 26,753,511 | |||||||||||
Treasury stock, shares | 12,231,674 | 10,536,737 | |||||||||||
Unvested restricted common stock issued | 648,493 | ||||||||||||
Additional paid-in capital | $ 334,711,000 | $ 332,797,000 | |||||||||||
Common stock voting rights | one vote | ||||||||||||
Stock repurchase program, authorized amount | $ 1,700,000 | $ 23,800,000 | $ 50,000,000 | ||||||||||
Stock repurchase program, expiration date | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | |||||||
Treasury shares repurchased, shares | 1,694,937 | 1,256,898 | 2,065,042 | ||||||||||
Treasury shares repurchased, value | $ 7,343,000 | $ 8,192,000 | $ 9,997,000 | $ 26,200,000 | |||||||||
Cash dividend per common share | $ 0.06 | $ 0.06 | |||||||||||
Cash dividend, payable date | Jul. 05, 2022 | Apr. 06, 2022 | |||||||||||
Dividend payable, record date | Jun. 14, 2022 | Mar. 17, 2022 | |||||||||||
Dividends payable date declared day month and year | May 05, 2022 | Aug. 03, 2022 | |||||||||||
Common stock, dividends, per share, declared | $ 0.06 | $ 0.12 | $ 0.24 | $ 0.24 | |||||||||
New Share Repurchase Plan [Member] | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Stock repurchase program, authorized amount | $ 50,000,000 | $ 25,000,000 | |||||||||||
Stock repurchase program, expiration date | Dec. 31, 2023 | ||||||||||||
Subsequent Event [Member] | New Share Repurchase Plan [Member] | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Stock repurchase program, authorized amount | $ 10,000 | ||||||||||||
Restricted Stock [Member] | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Unvested restricted common stock issued | 648,493 | 283,092 | 100,267 | 100,267 | 345,534 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jan. 01, 2022 | Mar. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | May 22, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Shares available for grant | 386,603 | ||||||
Annual cash fee for non-employee directors | $ 125,000 | ||||||
Additional annual cash fee for each committee members | 2,500 | ||||||
Additional annual cash fee for each chair of committee | 5,000 | ||||||
Additional annual cash fee for each non employee director chair of committee | 20,000 | ||||||
Value of number of shares of restricted stocks granted to non employee director | $ 40,000 | ||||||
Stock-based compensation expense | $ 2,000 | $ 1,200 | $ 4,700 | ||||
Shares withheld to cover withholding taxes | 28,271 | 28,257 | 247,223 | ||||
Unrecognized expense related to non-vested stock | $ 2,000 | ||||||
Restricted Stock [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Unvested restricted shares issued | 15,000 | ||||||
Canceled share | 40,693 | 28,257 | 247,223 | ||||
Number of shares granted fair value | $ 10.68 | ||||||
Restricted stock vested and released | 96,961 | 71,968 | 260,267 | ||||
Shares withheld to cover withholding taxes, value | $ 94,000 | $ 231,000 | $ 2,400 | ||||
Restricted Stock [Member] | Minimum [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Vesting period | 1 year | ||||||
Restricted Stock [Member] | Minimum [Member] | Employee [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Vesting period | 3 years | ||||||
Restricted Stock [Member] | Maximum [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Vesting period | 5 years | ||||||
Restricted Stock [Member] | Maximum [Member] | Employee [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Vesting period | 5 years | ||||||
Performance-Based Restricted Stock [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Unrecognized expense related to non-vested stock | $ 1,100 | ||||||
Time-based and Performance-based Restricted Stock [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Unvested restricted shares issued | 484,130 | 254,793 | |||||
Canceled share | 12,422 | ||||||
Time-Based Unvested Restricted Stock [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Unrecognized expense related to non-vested stock | $ 926,640 | ||||||
Omnibus Incentive Plan [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Common stock reserved for issuance | 2,981,737 | ||||||
Omnibus Incentive Plan [Member] | Restricted Stock [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Unvested restricted shares issued | 21,768 | 99,376 | |||||
Grant date fair value per share | $ 5.88 | $ 3.22 | |||||
Omnibus Incentive Plan [Member] | Time Based Shares [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Unvested restricted shares issued | 3,636 | ||||||
Grant date fair value per share | $ 5.50 | ||||||
Omnibus Incentive Plan [Member] | Time Based Restricted Stock [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Unvested restricted shares issued | 115,327 | ||||||
Grant date fair value per share | $ 6.72 | ||||||
Omnibus Incentive Plan [Member] | Time Based Restricted Stock [Member] | Minimum [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Vesting period | 2 years | ||||||
Omnibus Incentive Plan [Member] | Time Based Restricted Stock [Member] | Maximum [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Vesting period | 3 years | ||||||
Omnibus Incentive Plan [Member] | Performance Shares [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Unvested restricted shares issued | 10,909 | ||||||
Grant date fair value per share | $ 5.50 | ||||||
Omnibus Incentive Plan [Member] | Performance-Based Restricted Stock [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Unvested restricted shares issued | 245,536 | ||||||
Grant date fair value per share | $ 6.72 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Restricted Stock Activity (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Ending balance, Number of shares | 648,493 | ||
Restricted Stock [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Beginning balance, Number of shares | 283,092 | 100,267 | 345,534 |
Granted, Number of shares | 15,000 | ||
Vested, Number of shares | (90,458) | (43,711) | (13,044) |
Canceled and surrendered, Number of shares | (40,693) | (28,257) | (247,223) |
Ending balance, Number of shares | 648,493 | 283,092 | 100,267 |
Beginning balance, Weighted-Average Grant-Date Fair Value per Share | $ 9.32 | $ 15.37 | $ 19.56 |
Granted, Weighted-Average Grant-Date Fair Value per Share | 10.68 | ||
Vested, Weighted-Average Grant-Date Fair Value per Share | 4.81 | 9.61 | 13.17 |
Canceled and surrendered, Weighted-Average Grant-Date Fair Value per Share | 4.40 | 10.69 | 9.49 |
Ending balance, Weighted-Average Grant-Date Fair Value per Share | $ 7.38 | $ 9.32 | $ 15.37 |
Restricted Stock [Member] | Performance-Based Restricted Stock [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Granted, Number of shares | 256,445 | 174,689 | |
Granted, Weighted-Average Grant-Date Fair Value per Share | $ 6.67 | $ 9.45 | |
Restricted Stock [Member] | Time-Based Restricted Stock [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Granted, Number of shares | 240,107 | 80,104 | |
Granted, Weighted-Average Grant-Date Fair Value per Share | $ 5.18 | $ 9.68 |
Stock-Based Compensation - Ad_2
Stock-Based Compensation - Additional Information Regarding Outstanding Unvested Restricted Stock (Details) - $ / shares | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Unvested restricted common stock issued | 648,493 | |||
Restricted Stock [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Unvested restricted common stock issued | 648,493 | 100,267 | 283,092 | 345,534 |
Share Value at Grant Date Per Share | $ 10.68 | |||
Restricted Stock [Member] | February 12, 2018 [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Grant date | Feb. 12, 2018 | |||
Unvested restricted common stock issued | 25,000 | |||
Share Value at Grant Date Per Share | $ 16.35 | |||
Remaining Restriction Period (Years) | 0 years | |||
Restricted Stock [Member] | January 4, 2021 [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Grant date | Jan. 04, 2021 | |||
Unvested restricted common stock issued | 111,857 | |||
Share Value at Grant Date Per Share | $ 10.43 | |||
Remaining Restriction Period (Years) | 1 year 2 months 12 days | |||
Restricted Stock [Member] | April 13, 2021 [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Grant date | Apr. 13, 2021 | |||
Unvested restricted common stock issued | 32,681 | |||
Share Value at Grant Date Per Share | $ 10.71 | |||
Remaining Restriction Period (Years) | 1 year 2 months 12 days | |||
Restricted Stock [Member] | October 18, 2021 [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Grant date | Oct. 18, 2021 | |||
Unvested restricted common stock issued | 56,853 | |||
Share Value at Grant Date Per Share | $ 6.89 | |||
Remaining Restriction Period (Years) | 1 year 2 months 12 days | |||
Restricted Stock [Member] | March 3, 2022 [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Grant date | Mar. 03, 2022 | |||
Unvested restricted common stock issued | 12,727 | |||
Share Value at Grant Date Per Share | $ 5.50 | |||
Remaining Restriction Period (Years) | 2 years 2 months 12 days | |||
Restricted Stock [Member] | March 16, 2022 [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Grant date | Mar. 16, 2022 | |||
Unvested restricted common stock issued | 322,421 | |||
Share Value at Grant Date Per Share | $ 6.72 | |||
Remaining Restriction Period (Years) | 2 years 2 months 12 days | |||
Restricted Stock [Member] | June 23, 2022 [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Grant date | Jun. 23, 2022 | |||
Unvested restricted common stock issued | 86,954 | |||
Share Value at Grant Date Per Share | $ 3.22 | |||
Remaining Restriction Period (Years) | 6 months |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (unaudited) - Summary of Unaudited Quarterly Results (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||
Net premiums earned | $ 166,171 | $ 159,693 | $ 158,271 | $ 152,929 | $ 159,928 | $ 162,445 | $ 146,499 | $ 142,199 | $ 637,065 | $ 611,071 | $ 544,722 | ||||||||
Investment income | 4,927 | 2,887 | 2,163 | 2,000 | 1,855 | 1,548 | 956 | 1,293 | |||||||||||
Total revenues | 174,589 | 165,493 | 163,770 | 158,608 | 166,712 | 167,408 | 150,197 | 147,243 | 662,460 | 631,561 | 593,385 | ||||||||
Total operating expenses | 159,679 | [1] | 212,801 | [1] | 249,322 | [1] | 198,019 | [1] | 209,578 | [1] | 182,785 | [1] | 154,187 | [1] | 153,075 | [1] | 819,821 | 699,625 | 583,200 |
Operating (loss) income | 14,908 | (47,308) | (85,552) | (39,411) | (42,865) | (15,377) | (3,990) | (5,832) | (157,361) | (68,064) | 10,185 | ||||||||
Net (loss) income | $ 12,501 | $ (48,240) | $ (87,866) | $ (30,759) | $ (49,218) | $ (16,410) | $ (3,950) | $ (5,148) | $ (154,363) | $ (74,727) | $ 9,326 | ||||||||
Basic net (loss) income per share | $ 0.49 | $ (1.83) | $ (3.32) | $ (1.15) | $ (1.79) | $ (0.59) | $ (0.14) | $ (0.19) | $ (5.86) | $ (2.69) | $ 0.33 | ||||||||
Diluted net (loss) income per share | $ 0.48 | $ (1.83) | $ (3.32) | $ (1.15) | $ (1.79) | $ (0.59) | $ (0.14) | $ (0.19) | $ (5.86) | $ (2.69) | $ 0.33 | ||||||||
[1] The second quarter of 2022 and the fourth quarter of 2021 results include a $ 92.0 million and $ 60.5 million impairment of goodwill, respectively. Refer to Note 3 “ Goodwill and Other Intangible Assets ” to these consolidated financial statements for further information on our 2022 and 2021 goodwill impairment charge. |
Selected Quarterly Financial _4
Selected Quarterly Financial Data (unaudited) - Summary of Unaudited Quarterly Results (Parenthetical) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |||||
Goodwill impairment | $ 92,000 | $ 60,500 | $ 91,959 | $ 60,500 | $ 0 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
May 05, 2022 | Mar. 04, 2022 | Dec. 31, 2022 | Aug. 01, 2022 | |
Subsequent Event [Line Items] | ||||
Dividends payable date declared day month and year | May 05, 2022 | Aug. 03, 2022 | ||
Cash dividend per common share | $ 0.06 | $ 0.06 | ||
Cash dividend, payable date | Jul. 05, 2022 | Apr. 06, 2022 | ||
Dividend payable, record date | Jun. 14, 2022 | Mar. 17, 2022 | ||
Revolving Credit Facility [Member] | ||||
Subsequent Event [Line Items] | ||||
Outstanding borrowing capacity amount | $ 10 |
Schedule II - Condensed Finan_2
Schedule II - Condensed Financial Information of Registrant - Schedule of Condensed Balance Sheets (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||||
Cash and cash equivalents | $ 280,881 | $ 359,337 | ||
Other assets | 11,509 | 12,272 | ||
Total Assets | 2,392,600 | 1,980,762 | ||
LIABILITIES | ||||
Other liabilities | 80,010 | 71,525 | ||
Total Liabilities | 2,261,561 | 1,637,711 | ||
STOCKHOLDERS' EQUITY | ||||
Common stock | 3 | 3 | ||
Treasury stock | (130,900) | (123,557) | ||
Accumulated other comprehensive income, net of taxes | (53,585) | (4,573) | ||
Retained (deficit) earnings | (19,190) | 138,381 | ||
Total Stockholders' Equity | 131,039 | 343,051 | $ 442,344 | $ 448,799 |
Heritage Insurance Holdings, Inc. [Member] | ||||
ASSETS | ||||
Cash and cash equivalents | 1,109 | 6,404 | ||
Investment in and advances to subsidiaries | 269,325 | 484,096 | ||
Other assets | 7,207 | 4,728 | ||
Total Assets | 277,641 | 495,228 | ||
LIABILITIES | ||||
Other liabilities | 146,602 | 152,177 | ||
Total Liabilities | 146,602 | 152,177 | ||
STOCKHOLDERS' EQUITY | ||||
Common stock | 3 | 3 | ||
Paid-in-capital | 334,711 | 332,797 | ||
Treasury stock | 130,900 | (123,557) | ||
Accumulated other comprehensive income, net of taxes | (53,585) | (4,573) | ||
Retained (deficit) earnings | (19,190) | 138,381 | ||
Total Stockholders' Equity | 131,039 | 343,051 | ||
Total Liabilities and Stockholders' Equity | $ 277,641 | $ 495,228 |
Schedule II - Condensed Finan_3
Schedule II - Condensed Financial Information of Registrant - Schedule of Condensed Statements of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Revenue: | |||||||||||||
Other revenue | $ 13,676 | $ 14,854 | $ 13,966 | ||||||||||
Total revenue | $ 174,589 | $ 165,493 | $ 163,770 | $ 158,608 | $ 166,712 | $ 167,408 | $ 150,197 | $ 147,243 | 662,460 | 631,561 | 593,385 | ||
Expenses: | |||||||||||||
General and administrative expense | [1] | 70,396 | 65,787 | 81,537 | |||||||||
Interest expense, net | 8,809 | 7,970 | 7,972 | ||||||||||
Benefit from income taxes | (11,807) | (1,307) | (7,113) | ||||||||||
Net (loss) income | $ 12,501 | $ (48,240) | $ (87,866) | $ (30,759) | $ (49,218) | $ (16,410) | $ (3,950) | $ (5,148) | (154,363) | (74,727) | $ 9,326 | ||
Heritage Insurance Holdings, Inc. [Member] | |||||||||||||
Revenue: | |||||||||||||
Other revenue | 589 | 1,511 | $ 5,717 | ||||||||||
Total revenue | 589 | 1,511 | 5,717 | ||||||||||
Expenses: | |||||||||||||
General and administrative expense | 6,671 | 10,498 | 13,021 | ||||||||||
Amortization of debt issuance cost | 1,449 | 2,500 | 2,128 | ||||||||||
Interest expense, net | 7,471 | 5,895 | 7,769 | ||||||||||
Total expenses | 15,591 | 18,893 | 22,918 | ||||||||||
Loss before income taxes and equity in net income of subsidiaries | (15,002) | (17,382) | (17,201) | ||||||||||
Benefit from income taxes | (3,147) | (3,526) | (3,425) | ||||||||||
Loss before equity in net income of subsidiaries | (11,855) | (13,856) | (13,776) | ||||||||||
Equity in net income of subsidiaries | (142,508) | (60,871) | 23,102 | ||||||||||
Net (loss) income | $ (154,363) | $ (74,727) | $ 9,326 | ||||||||||
[1] General and administration includes $ 15.4 million, $ 15.6 million and $ 14.1 million of ceding commission income for the reporting years 2022, 2021 and 2020, respectively . |
Schedule II - Condensed Finan_4
Schedule II - Condensed Financial Information of Registrant - Schedule of Condensed Statements of Cash Flows (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net loss | $ (154,363) | $ (74,727) | $ 9,326 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Stock-based compensation | 2,008 | 1,161 | 4,683 |
Net realized gains | 258 | (64) | (22,395) |
Amortization of debt issuance cost | 1,037 | 1,784 | 1,415 |
Deferred income taxes | (11,202) | (5,956) | 6,238 |
Changes in operating assets and liabilities: | |||
Accrued interest on debt | (3) | 26 | (214) |
Other assets | 763 | (729) | 291 |
Other liabilities | 10,050 | (9,278) | 18,131 |
Net cash (used in) provided by operating activities | (34,260) | 60,130 | 170,211 |
Investing Activities | |||
Net cash (used in) provided by investing activities | (37,862) | (124,480) | 22,062 |
Financing Activities | |||
Mortgage loan payments | (322) | (306) | (290) |
Repurchase of convertible notes | (22,529) | 0 | 0 |
Shares tendered for income tax withholdings | (94) | (231) | (2,384) |
Purchase of treasury stock | (7,343) | (8,192) | (9,997) |
Dividends paid | (4,770) | (6,709) | (6,852) |
Net cash used in financing activities | (5,058) | (17,281) | (28,898) |
(Decrease) increase in cash, cash equivalents, and restricted cash | (77,180) | (81,631) | 163,375 |
Cash, cash equivalents and restricted cash, beginning of period | 364,752 | 446,383 | 283,008 |
Cash, cash equivalents and restricted cash, end of period | 287,572 | 364,752 | 446,383 |
Heritage Insurance Holdings, Inc. [Member] | |||
Cash flows from operating activities: | |||
Net loss | (11,854) | (13,856) | (13,776) |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Stock-based compensation | 2,008 | 1,161 | 4,683 |
Net realized gains | 0 | 0 | 0 |
Amortization of debt issuance cost | 1,448 | 1,657 | 0 |
Impairment on other investments | 0 | 1,157 | 0 |
Deferred income taxes | (474) | (69) | (343) |
Changes in operating assets and liabilities: | |||
Prepaid | 8 | 1,160 | 317 |
Income taxes payable | 14,674 | 10,764 | (8,585) |
Accrued interest on debt | 0 | 306 | 400 |
Other assets | 332 | (2,100) | (2,448) |
Dividends payable | (1,562) | (36) | (80) |
Other liabilities | 170 | (416) | 460 |
Net cash (used in) provided by operating activities | 23,252 | (18,949) | (41,385) |
Investing Activities | |||
Dividends received from subsidiaries | 32,200 | 41,138 | 47,256 |
Investments and advances to subsidiaries | (8,948) | (22,189) | (5,872) |
Net cash (used in) provided by investing activities | (23,651) | 271 | 19,372 |
Financing Activities | |||
Mortgage loan payments | (322) | (613) | (290) |
Draw From Credit Facility | 35,000 | 0 | 0 |
Repurchase of convertible notes | (22,529) | 0 | 0 |
Repayments of long-term debt | (6,400) | (2,430) | (9,375) |
Shares tendered for income tax withholdings | (94) | (231) | (2,384) |
Purchase of treasury stock | (7,343) | (8,192) | (9,997) |
Dividends paid | (3,208) | (6,673) | (6,772) |
Net cash used in financing activities | (4,896) | (18,139) | (28,818) |
(Decrease) increase in cash, cash equivalents, and restricted cash | (5,295) | 539 | (6,806) |
Cash, cash equivalents and restricted cash, beginning of period | 6,404 | 5,865 | 12,671 |
Cash, cash equivalents and restricted cash, end of period | $ 1,109 | $ 6,404 | $ 5,865 |
Schedule V - Valuation Allowa_2
Schedule V - Valuation Allowances and Qualifing Accounts (Detail) - Allowances for Doubtful Accounts [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Valuation And Qualifying Accounts Disclosure [Line Items] | ||
Beginning balance | $ 451 | $ 451 |
Charges in earnings | 0 | 0 |
Charges to other accounts | 0 | 0 |
Deductions | 0 | 0 |
Ending balance | $ 451 | $ 451 |
Schedule VI - Supplemental In_2
Schedule VI - Supplemental Information Concerning Consolidated Property and Casuality Insurance Operations (Detail) - Consolidated Property and Casuality Insurance [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Supplemental Information For Property Casualty Insurance Underwriters [Line Items] | |||
Reserves for Unpaid Losses and LAE | $ 1,131,807 | $ 659,341 | $ 590,166 |
Incurred Losses and LAE Current Year | 497,428 | 392,976 | 430,907 |
Incurred Losses and LAE Prior Years | 3,734 | (19,589) | (3,537) |
Paid losses and LAE | 417,445 | 331,637 | 400,614 |
Net Investment Income | 11,977 | 12,302 | 5,652 |
Deferred Policy Acquisition Costs ("DPAC") | 99,617 | 89,265 | 93,881 |
Amortization of DPAC, Net | 197,057 | 159,220 | 188,490 |
Net Premiums Written | 662,168 | 606,264 | 611,732 |
Net Premiums Earned | 637,065 | 544,722 | 611,071 |
Unearned Premiums | $ 656,641 | $ 569,618 | $ 590,419 |