Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 09, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-39392 | ||
Entity Registrant Name | TREAN INSURANCE GROUP, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 84-4512647 | ||
Entity Address, Address Line One | 150 Lake Street West | ||
Entity Address, City or Town | Wayzata | ||
Entity Address, State or Province | MN | ||
Entity Address, Postal Zip Code | 55391 | ||
City Area Code | 952 | ||
Local Phone Number | 974-2200 | ||
Title of 12(b) Security | Common Stock, $0.01 par value per share | ||
Trading Symbol | TIG | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 338,889,839 | ||
Entity Common Stock, Shares Outstanding | 51,176,887 | ||
Documents Incorporated by Reference | Portions of the registrant's definitive Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference in Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001801754 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | Deloitte & Touche LLP |
Auditor Location | Minneapolis, Minnesota |
Auditor Firm ID | 34 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Investments [Abstract] | ||
Fixed maturities, at fair value (amortized cost of $465,459 and $388,409, respectively) | $ 471,061 | $ 405,604 |
Equity securities, FV-NI | 969 | 3,774 |
Equity method investments | 0 | 232 |
Total investments | 472,030 | 409,610 |
Cash and cash equivalents | 129,577 | 153,149 |
Restricted cash | 407 | 4,085 |
Accrued investment income | 2,344 | 2,458 |
Premiums and other receivables | 141,920 | 109,217 |
Income taxes receivable | 460 | 1,322 |
Reinsurance recoverable | 377,241 | 343,213 |
Prepaid reinsurance premiums | 129,411 | 107,971 |
Deferred policy acquisition cost, net | 13,344 | 1,332 |
Property and equipment, net | 7,632 | 8,254 |
Right of use asset | 4,530 | 6,338 |
Goodwill | 142,347 | 140,640 |
Intangible assets, net | 73,114 | 75,316 |
Other assets | 8,658 | 6,878 |
Total assets | 1,503,015 | 1,369,783 |
Liabilities | ||
Unpaid loss and loss adjustment expenses | 544,320 | 457,817 |
Unearned premiums | 219,940 | 157,987 |
Funds held under reinsurance agreements | 199,410 | 174,704 |
Reinsurance premiums payable | 45,130 | 57,069 |
Accounts payable and accrued expenses | 29,448 | 61,240 |
Lease liability | 4,976 | 6,893 |
Deferred tax liability, net | 7,520 | 12,329 |
Debt | 30,362 | 31,637 |
Total liabilities | 1,081,106 | 959,676 |
Commitments and contingencies | ||
Stockholders' equity | ||
Common stock, $0.01 par value per share (600,000,000 authorized, respectively; 51,176,887 and 51,148,782 issued and outstanding, respectively) | 512 | 511 |
Additional paid-in capital | 288,623 | 287,110 |
Retained earnings | 128,390 | 109,060 |
Accumulated other comprehensive income | 4,384 | 13,426 |
Total stockholders' equity | 421,909 | 410,107 |
Total liabilities and stockholders' equity | $ 1,503,015 | $ 1,369,783 |
Common stock, authorized (in shares) | 600,000,000 | 600,000,000 |
Preferred Stock | ||
Investments [Abstract] | ||
Equity securities, FV-NI | $ 228 | $ 240 |
Common Stock | ||
Investments [Abstract] | ||
Equity securities, FV-NI | $ 741 | $ 3,534 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Amortized cost | $ 465,459 | $ 388,409 |
Equity securities, cost | $ 984 | $ 1,797 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock, issued (in shares) | 51,176,887 | 51,148,782 |
Common stock, outstanding (in shares) | 51,176,887 | 51,148,782 |
Preferred Stock | ||
Equity securities, cost | $ 243 | $ 243 |
Common Stock | ||
Equity securities, cost | $ 741 | $ 1,554 |
Consolidated and Combined State
Consolidated and Combined Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues | |||
Gross written premiums | $ 634,164 | $ 484,249 | $ 411,401 |
Increase in gross unearned premiums | (61,911) | (52,215) | (13,598) |
Gross earned premiums | 572,253 | 432,034 | 397,803 |
Ceded earned premiums | (373,573) | (323,567) | (311,325) |
Net earned premiums | 198,680 | 108,467 | 86,478 |
Net investment income | 8,721 | 11,669 | 9,567 |
Gain on revaluation of Compstar investment | 0 | 69,846 | 0 |
Net realized gains | 49 | 3,365 | 667 |
Other revenue | 10,240 | 12,104 | 9,125 |
Total revenue | 217,690 | 205,451 | 105,837 |
Expenses | |||
Losses and loss adjustment expenses | 130,772 | 50,774 | 44,661 |
General and administrative expenses | 54,706 | 38,668 | 20,959 |
Other expenses | 845 | 13,427 | 0 |
Intangible asset amortization | 5,826 | 2,573 | 46 |
Noncash stock compensation | 1,522 | 506 | 0 |
Interest expense | 1,685 | 1,922 | 2,169 |
Total expenses | 195,356 | 107,870 | 67,835 |
Gains (losses) on embedded derivatives | 2,226 | (6,155) | (7,321) |
Other income | 219 | 1,025 | 121 |
Income before taxes | 24,779 | 92,451 | 30,802 |
Income tax expense | 5,449 | 6,235 | 6,234 |
Equity earnings in affiliates, net of tax | 0 | 2,333 | 3,558 |
Net income | $ 19,330 | $ 88,549 | $ 28,126 |
Earnings per share: | |||
Basic (in dollars per share) | $ 0.38 | $ 2.02 | $ 0.75 |
Diluted (in dollars per share) | $ 0.38 | $ 2.02 | $ 0.75 |
Weighted average shares outstanding: | |||
Weighted average number of shares outstanding - basic (in shares) | 51,162,293 | 43,744,003 | 37,386,394 |
Weighted average number of shares outstanding - diluted (in shares) | 51,173,450 | 43,744,744 | 37,386,394 |
Consolidated and Combined Sta_2
Consolidated and Combined Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 19,330 | $ 88,549 | $ 28,126 |
Unrealized investment gains (losses): | |||
Unrealized investment gains (losses) arising during the period | (11,386) | 9,028 | 12,707 |
Income tax expense (benefit) | (2,391) | 1,903 | 2,671 |
Unrealized investment gains (losses), net of tax | (8,995) | 7,125 | 10,036 |
Less reclassification adjustments to: | |||
Net realized investment gains included in net realized gains | 59 | 252 | 67 |
Income tax expense | 12 | 53 | 14 |
Total reclassifications included in net income, net of tax | 47 | 199 | 53 |
Other comprehensive income (loss) | (9,042) | 6,926 | 9,983 |
Total comprehensive income | $ 10,288 | $ 95,475 | $ 38,109 |
Consolidated and Combined Sta_3
Consolidated and Combined Statements of Stockholders’ Equity and Redeemable Preferred Stock - USD ($) $ in Thousands | Total | Compstar Holding Company LLC | Initial Public Offering | Class C - Non Voting | Series A Preferred Stock | Series B Preferred Stock | Common Stock | Common StockCompstar Holding Company LLC | Common StockInitial Public Offering | Common StockClass A - Non Voting | Common StockClass B - Voting | Common StockClass B - Non Voting | Common StockClass C - Non Voting | Additional Paid in Capital | Additional Paid in CapitalCompstar Holding Company LLC | Additional Paid in CapitalInitial Public Offering | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Deficit) | Retained Earnings (Deficit)Series A Preferred Stock | Retained Earnings (Deficit)Series B Preferred Stock | Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect, Period of Adoption, AdjustmentRetained Earnings (Deficit) |
Preferred Stock | ||||||||||||||||||||||
Members' Equity | $ 105,131 | $ 0 | $ 65,037 | $ 5,045 | $ 8,160 | $ 118 | $ 17,995 | $ (3,483) | $ 11,259 | $ 695 | $ 695 | |||||||||||
Redeemable preferred stock beginning balance (in shares) at Dec. 31, 2018 | 60 | |||||||||||||||||||||
Redeemable preferred stock beginning balance at Dec. 31, 2018 | $ 6,000 | |||||||||||||||||||||
Redeemable Preferred Stock | ||||||||||||||||||||||
Issuance of Preferred Stock (in shares) | 9 | 78,635 | ||||||||||||||||||||
Issuance of Preferred Stock | 78 | $ 900 | $ 78 | |||||||||||||||||||
Redemption of Series Redeemable Preferred Stock (in shares) | (10) | |||||||||||||||||||||
Redemption of Series Redeemable Preferred Stock | $ (1,000) | $ (1,000) | ||||||||||||||||||||
Redeemable preferred stock ending balance (in shares) at Dec. 31, 2019 | 51 | |||||||||||||||||||||
Redeemable preferred stock ending balance at Dec. 31, 2019 | $ 5,100 | |||||||||||||||||||||
Preferred stock beginning balance (in shares) at Dec. 31, 2018 | 10 | |||||||||||||||||||||
Preferred stock beginning balance at Dec. 31, 2018 | $ 1,000 | |||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||
Redemption of Series Redeemable Preferred Stock (in shares) | (10) | |||||||||||||||||||||
Redemption of Series Redeemable Preferred Stock | $ (1,000) | $ (1,000) | ||||||||||||||||||||
Preferred stock ending balance (in shares) at Dec. 31, 2019 | 0 | |||||||||||||||||||||
Preferred stock ending balance at Dec. 31, 2019 | $ 0 | |||||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2018 | 0 | 65,036,780 | 5,045,215 | 8,159,775 | 117,953 | |||||||||||||||||
Members' equity beginning balance at Dec. 31, 2018 | $ 105,131 | $ 0 | $ 65,037 | $ 5,045 | $ 8,160 | $ 118 | 17,995 | (3,483) | 11,259 | $ 695 | $ 695 | |||||||||||
Stockholders' equity beginning balance at Dec. 31, 2018 | (3,483) | |||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||
Accounting standards update | Accounting Standards Update 2014-09 [Member] | |||||||||||||||||||||
Shares issued during period (in shares) | 9 | 78,635 | ||||||||||||||||||||
Shares issued during period | $ 78 | $ 900 | $ 78 | |||||||||||||||||||
Distribution to members | (1,144) | (1,144) | ||||||||||||||||||||
Dividends paid on Series preferred stock | (43) | $ (211) | $ (43) | $ (211) | ||||||||||||||||||
Redemption of Series Redeemable Preferred Stock | (1,000) | $ (1,000) | ||||||||||||||||||||
Issuance of common shares for acquisition of Compstar | 0 | |||||||||||||||||||||
Other comprehensive income (loss) | 9,983 | 9,983 | ||||||||||||||||||||
Net income | 28,126 | 28,126 | ||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2019 | 0 | 65,036,780 | 5,045,215 | 8,159,775 | 196,588 | |||||||||||||||||
Members' equity ending balance at Dec. 31, 2019 | 141,615 | $ 0 | $ 65,037 | $ 5,045 | $ 8,160 | $ 196 | 17,995 | 6,500 | 38,682 | |||||||||||||
Stockholders' equity ending balance at Dec. 31, 2019 | 6,500 | |||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||
Members' Equity | $ 141,615 | $ 0 | $ 65,037 | $ 5,045 | $ 8,160 | $ 196 | 17,995 | 6,500 | 38,682 | |||||||||||||
Issuance of Preferred Stock (in shares) | 7,142,857 | 196,587 | ||||||||||||||||||||
Issuance of Preferred Stock | $ 93,139 | $ 197 | $ 71 | $ 197 | $ 93,068 | |||||||||||||||||
Redemption of Series Redeemable Preferred Stock (in shares) | (51) | |||||||||||||||||||||
Redemption of Series Redeemable Preferred Stock | $ (5,100) | |||||||||||||||||||||
Redeemable preferred stock ending balance (in shares) at Dec. 31, 2020 | 0 | |||||||||||||||||||||
Redeemable preferred stock ending balance at Dec. 31, 2020 | $ 0 | |||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||
Redemption of Series Redeemable Preferred Stock (in shares) | (51) | |||||||||||||||||||||
Redemption of Series Redeemable Preferred Stock | $ (5,100) | |||||||||||||||||||||
Preferred stock ending balance (in shares) at Dec. 31, 2020 | 0 | |||||||||||||||||||||
Preferred stock ending balance at Dec. 31, 2020 | $ 0 | |||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||
Shares issued during period (in shares) | 7,142,857 | 196,587 | ||||||||||||||||||||
Shares issued during period | $ 93,139 | $ 197 | $ 71 | $ 197 | $ 93,068 | |||||||||||||||||
Distribution to members | (19,819) | (1,776) | (18,043) | |||||||||||||||||||
Dividends paid on Series preferred stock | (128) | $ (128) | ||||||||||||||||||||
Redemption of Series Redeemable Preferred Stock | $ (5,100) | |||||||||||||||||||||
Corporate recapitalization (in shares) | 37,386,394 | (65,036,780) | (5,045,215) | (8,159,775) | (393,175) | |||||||||||||||||
Corporate recapitalization | 0 | $ 374 | $ (65,037) | $ (5,045) | $ (8,160) | $ (393) | 78,261 | |||||||||||||||
Issuance of common shares for acquisition of Compstar (in shares) | 6,613,606 | |||||||||||||||||||||
Issuance of common shares for acquisition of Compstar | 99,204 | $ 99,204 | $ 66 | $ 99,138 | ||||||||||||||||||
Common stock issuances pursuant to equity compensation awards (in shares) | 5,925 | |||||||||||||||||||||
Common stock issuances pursuant to equity compensation awards | (82) | (82) | ||||||||||||||||||||
Stock compensation expense | 506 | 506 | ||||||||||||||||||||
Other comprehensive income (loss) | 6,926 | 6,926 | ||||||||||||||||||||
Net income | $ 88,549 | 88,549 | ||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 51,148,782 | 51,148,782 | 0 | 0 | 0 | 0 | ||||||||||||||||
Stockholders' equity ending balance at Dec. 31, 2020 | $ 410,107 | $ 511 | $ 0 | $ 0 | $ 0 | $ 0 | 287,110 | 13,426 | 109,060 | |||||||||||||
Preferred Stock | ||||||||||||||||||||||
Distribution to members | 0 | |||||||||||||||||||||
Issuance of common shares for acquisition of Compstar | 0 | |||||||||||||||||||||
Common stock issuances pursuant to equity compensation awards (in shares) | 28,105 | |||||||||||||||||||||
Common stock issuances pursuant to equity compensation awards | (93) | $ 1 | (94) | |||||||||||||||||||
Stock compensation expense | 1,522 | 1,522 | ||||||||||||||||||||
Other comprehensive income (loss) | (9,042) | (9,042) | ||||||||||||||||||||
Net income | 19,330 | 19,330 | ||||||||||||||||||||
Proceeds from short swing rule | $ 85 | 85 | ||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2021 | 51,176,887 | 51,176,887 | ||||||||||||||||||||
Stockholders' equity ending balance at Dec. 31, 2021 | $ 421,909 | $ 512 | $ 288,623 | $ 4,384 | $ 128,390 |
Consolidated and Combined Sta_4
Consolidated and Combined Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating activities | |||
Net income | $ 19,330 | $ 88,549 | $ 28,126 |
Adjustments to reconcile net income to net cash from operating activities: | |||
Depreciation and amortization | 6,833 | 3,485 | 876 |
Stock compensation | 1,522 | 506 | 0 |
Net gains on investments | (49) | (5,155) | (76) |
Unrealized (gain) loss on embedded derivatives | (4,666) | 2,810 | 3,999 |
Forgiveness of PPP loan | 0 | (325) | 0 |
Deferred offering costs | 0 | 0 | (411) |
Gain on bargain purchase of subsidiary | 0 | 0 | (634) |
Loss on disposal of subsidiary | 0 | 0 | 34 |
Gain on revaluation of Compstar investment | 0 | (69,846) | 0 |
Bond amortization and accretion | 2,297 | 1,915 | 1,713 |
Issuance of member units as compensation | 0 | 197 | 78 |
Equity losses (earnings) in affiliates, net of tax | 0 | (2,333) | (3,558) |
Distributions from equity method investments | 0 | 2,953 | 5,489 |
Deferred income taxes | (2,405) | (1,035) | (1,958) |
Deferred financing costs | 168 | 132 | 101 |
Changes in operating assets and liabilities: | |||
Accrued investment income | 114 | 17 | (56) |
Premiums and other receivables | (31,921) | (18,499) | (4,777) |
Reinsurance recoverable on paid and unpaid losses | (34,028) | (30,805) | (49,829) |
Prepaid reinsurance premiums | (21,441) | (26,963) | (13,323) |
Right of use asset | 1,942 | (5,121) | 0 |
Other assets | (13,776) | 4,459 | 631 |
Unpaid loss and loss adjustment expenses | 86,503 | 42,985 | 59,874 |
Unearned premiums | 61,953 | 50,367 | 12,712 |
Funds held under reinsurance agreements | 43,062 | 7,861 | 2,631 |
Reinsurance premiums payable | (11,939) | 3,449 | 12,448 |
Accounts payable and accrued expenses | (7,951) | (2,976) | (639) |
Lease liability | (2,051) | 5,371 | 0 |
Income taxes payable | 862 | (1,986) | (1,278) |
Net cash provided by operating activities | 94,359 | 50,012 | 52,173 |
Investing activities | |||
Payments for capital expenditures | (346) | (807) | (633) |
Proceeds from sale of equity method investment | 232 | 3,000 | 0 |
Return of capital on equity method investment | 0 | 115 | 0 |
Purchase of investments, available for sale | (197,041) | (129,233) | (89,171) |
Proceeds from investments sold, matured or repaid | 80,794 | 105,322 | 71,357 |
Acquisition of subsidiary, net of cash received | (3,795) | (10,534) | (5,496) |
Cash received in the acquisition of Compstar | 0 | 11,891 | 0 |
Net cash used in investing activities | (120,156) | (20,246) | (23,943) |
Financing activities | |||
Shares redeemed for payroll taxes | (94) | (82) | 0 |
Proceeds from initial public offering | 0 | 99,643 | 0 |
Deferred offering costs | 0 | (5,839) | 0 |
Proceeds from credit agreement | 0 | 32,453 | 0 |
Principal payments on debt | (1,444) | (49,728) | (4,832) |
Proceeds from short swing rule | 85 | 0 | 0 |
Buyback of preferred shares | 0 | (5,100) | (1,900) |
Distribution to members | 0 | (19,819) | (1,144) |
Dividends paid on preferred stock | 0 | (128) | (249) |
Net cash provided by (used in) financing activities | (1,453) | 51,400 | (8,125) |
Net increase (decrease) in cash, cash equivalents and restricted cash | (27,250) | 81,166 | 20,105 |
Cash, cash equivalents and restricted cash ‑ beginning of period | 157,234 | 76,068 | 55,963 |
Cash, cash equivalents and restricted cash ‑ end of period | 129,984 | 157,234 | 76,068 |
Disaggregation of cash and restricted cash: | |||
Cash and cash equivalents | 129,577 | 153,149 | 74,268 |
Restricted cash | 407 | 4,085 | 1,800 |
Total cash, cash equivalents and restricted cash | 129,984 | 157,234 | 76,068 |
Supplemental disclosure of cash flow information: | |||
Interest | 1,517 | 1,790 | 2,068 |
Income taxes | 6,957 | 9,259 | 9,137 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 338 | 8,536 | 0 |
Shares issued for the acquisition of subsidiary | 0 | 99,204 | 0 |
Accrued purchases of property and equipment | 0 | 132 | 0 |
Non-cash transfer of investments to settle funds held for reinsurance | 13,562 | 0 | 0 |
Non-cash transfer of investments to settle amounts held for others in accounts payable | 26,211 | 0 | 0 |
Contingent consideration for the acquisition of subsidiary | 1,500 | 0 | 0 |
Operating cash flows from operating leases | $ 2,501 | $ 2,101 | $ 0 |
Business and Basis of Presentat
Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Basis of Presentation | Business and Basis of Presentation In July 2020, Trean Insurance Group, Inc. (together with its wholly owned subsidiaries, the Company) completed its initial public offering ("IPO") of common stock. Prior to the completion of the IPO, the Company effected the following reorganization transactions: (i) each of Trean Holdings LLC ("Trean"), an insurance services company, and BIC Holdings LLC ("BIC"), a property and casualty insurance holding company, contributed all of their respective assets and liabilities to Trean Insurance Group, Inc., a newly formed direct subsidiary of BIC, in exchange for shares of common stock in Trean Insurance Group, Inc.; and (ii) upon the completion of the transfers by Trean and BIC, Trean and BIC were dissolved and distributed in-kind common shares to the pre-IPO unitholders. For the purpose of financial statement disclosures, references to the consolidated financial statements for all post-IPO periods include the accounts of Trean Insurance Group, Inc., along with its wholly owned subsidiaries, after elimination of intercompany accounts and transactions. References to the consolidated financial statements for all pre-IPO periods include the combined financial statements of BIC and Trean, along with their wholly owned subsidiaries, after elimination of intercompany accounts and transactions. The Company provides products and services to the specialty insurance market. Historically, the Company has focused on specialty casualty markets that are believed to be under served and where the Company’s expertise allows the Company to achieve higher rates, such as niche workers' compensation markets and small- to medium-sized specialty casualty insurance programs. The Company underwrites specialty-casualty insurance products both through programs, where the Company partners with other organizations (Program Partners), and also through the Company’s own managing general agencies (Owned MGAs). The Company also provides Program Partners with a variety of services, including issuing carrier services, claims administration, and reinsurance brokerage from which the Company generates fee-based revenues. The Company's wholly owned subsidiaries include (a) Benchmark Holding Company, a property and casualty insurance holding company, which owns Benchmark Insurance Company ("Benchmark"), a property and casualty insurance company domiciled in the state of Kansas, American Liberty Insurance Company ("ALIC"), a property and casualty insurance company domiciled in the state of Utah, 7710 Insurance Company ("7710"), a property and casualty insurance company domiciled in the state of South Carolina and Benchmark Specialty Insurance Company ("BSIC"), a property and casualty insurance company domiciled in the state of Arkansas; (b) Trean Compstar Holdings, LLC, a limited liability company created originally for the purchase of Compstar Insurance Services LLC, a California-based general agency; and (c) Trean Corporation ("Trean Corp"), a reinsurance intermediary manager and a managing general agent, which consists of the following wholly owned subsidiaries: Trean Reinsurance Services, LLC ("TRS"), a reinsurance intermediary broker; Benchmark Administrators LLC ("BIC Admin"), a claims third-party administrator; Western Integrated Care, LLC ("WIC"), a managed care organization; and Westcap Insurance Services, LLC ("Westcap"), a managing general agent based in California. The accompanying consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and with the instructions to Form 10-K under the Securities Exchange Act of 1934. All dollar amounts are shown in thousands, except share and per share amounts. During the second quarter of 2021, the Company determined that its funds held agreements with reinsurers contain embedded derivatives relating to a total return swap on the underlying investments. As a result, the Company has revised the presentation of its financial results to report the change in fair value of the embedded derivatives in gains (losses) on embedded derivatives in the consolidated and combined statements of operations. In addition, investment earnings credited to the funds withheld accounts are reported in gains (losses) on embedded derivatives in the consolidated and combined statements of operations, whereas previously these were reported as an offset to net investment income. While the prior period amounts have been corrected for comparability, the correction was not material to the previously reported consolidated and combined financial statements. The impact of the prior period corrections on the consolidated balance sheet and the related components of stockholders' equity was as follows: December 31, 2020 December 31, 2019 Previously reported Adjustment As adjusted Previously reported Adjustment As adjusted Retained earnings $ 112,959 $ (3,899) $ 109,060 $ 40,361 $ (1,679) $ 38,682 Accumulated other comprehensive income 9,527 3,899 13,426 4,821 1,679 6,500 December 31, 2018 Previously reported Adjustment As adjusted Retained earnings $ 9,779 $ 1,480 $ 11,259 Accumulated other comprehensive income (2,003) (1,480) (3,483) The impact of the prior period corrections on the consolidated statements of operations and other comprehensive income is as follows: Year Ended December 31, 2020 Previously reported Adjustment As adjusted Net investment income $ 8,324 $ 3,345 $ 11,669 Total revenue 202,106 3,345 205,451 Gains (losses) on embedded derivatives — (6,155) (6,155) Income before taxes 95,261 (2,810) 92,451 Income tax expense 6,825 (590) 6,235 Net income $ 90,769 $ (2,220) $ 88,549 Earnings per share: Basic $ 2.08 $ (0.06) $ 2.02 Diluted $ 2.07 $ (0.05) $ 2.02 Other comprehensive income, net of tax Unrealized investment gains: Unrealized investment gains arising during the period $ 6,218 $ 2,810 $ 9,028 Income tax expense 1,313 590 1,903 Unrealized investment gains, net of tax 4,905 2,220 7,125 Other comprehensive income $ 4,706 $ 2,220 $ 6,926 Year Ended December 31, 2019 Previously reported Adjustment As adjusted Net investment income $ 6,245 $ 3,322 $ 9,567 Total revenue 102,515 3,322 105,837 Gains (losses) on embedded derivatives — (7,321) (7,321) Income before taxes 34,801 (3,999) 30,802 Income tax expense 7,074 (840) 6,234 Net income $ 31,285 $ (3,159) $ 28,126 Earnings per share: Basic $ 0.84 $ (0.09) $ 0.75 Diluted $ 0.84 $ (0.09) $ 0.75 Other comprehensive income, net of tax Unrealized investment gains: Unrealized investment gains arising during the period $ 8,708 $ 3,999 $ 12,707 Income tax expense 1,831 840 2,671 Unrealized investment gains, net of tax 6,877 3,159 10,036 Other comprehensive income $ 6,824 $ 3,159 $ 9,983 The correction of the prior period amounts had no impact on total operating, investing, and financing activities as presented on the Company’s consolidated statements of cash flows during the years ended December 31, 2020 and 2019. In conjunction with the correction of the prior period amounts, the fair value leveling table as of December 31, 2020 in Note 4 was corrected from $174,704, which represented the total funds withheld under reinsurance agreements liability, to $4,937, which relates only to the fair value of the embedded derivative. The net investment income table in Note 5 was corrected to incorporate the income from funds held investments of $3,345 and $3,322 for the years ended December 31, 2020 and 2019, respectively. Note 14 has been corrected to reflect the changes to income tax expense described above; the rates in the effective tax rate table in Note 14 were corrected from 7.2% to 6.7% for the year ended December 31, 2020 and from 20.3% to 20.2% for the year ended December 31, 2019. Note 20 has been corrected to reflect the changes to other comprehensive income described above. Use of estimates While preparing the consolidated financial statements, the Company has made certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements, as well as reported amounts of revenue and expenses during the reporting period. Accordingly, actual results could differ from those estimates. Reported amounts that require extensive use of estimates include the reserves for unpaid losses and loss adjustment expenses ("LAE"), reinsurance recoverables, investments, goodwill and intangible assets. Except for the captions on the consolidated balance sheets and consolidated and combined statements of comprehensive income, generally, the term loss(es) is used to collectively refer to both losses and LAE. Accounting pronouncements Recently adopted policies In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04). This update provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. This standard is effective for the period between March 12, 2020 and December 31, 2022. The adoption of this standard did not have a material impact on the consolidated financial statements. Pending policies The Company completed its IPO in July 2020, and is an emerging growth company as defined under federal securities laws. As such, the Company has elected to adopt pending accounting policies under the dates required for private companies. Therefore, the dates included within this section reflect the effective dates for the adoption of new accounting policies required by private companies. In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments (ASU 2020-03). This update represents changes to clarify and improve the codification to allow for easier application by eliminating inconsistencies and providing clarification on items such as (i) the application of fair value option disclosures; (ii) the accounting for fees related to modifications of debt; and (iii) aligning the contractual term of a net investment in a lease in accordance with ASC Topic 326, Financial Instruments - Credit Losses , and the lease term determined in accordance with ASC Topic 842, Leases . The Company adopted items (i) and (ii) effective January 1, 2020 and will adopt item (iii) on January 1, 2023. Adoption of this standard has not had, and is not expected to have, a material impact on the consolidated financial statements. In January 2020, the FASB issued ASU No. 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivative and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323 and Topic 815 (ASU 2020-01). This update addresses the accounting for certain equity securities upon the application or discontinuation of the equity method of accounting. Further, the update addresses scope considerations for forward contracts and purchased options on certain securities. ASU 2020-01 is effective for annual periods beginning after December 15, 2021, including interim periods thereafter. The Company will adopt this standard effective January 1, 2022. Adoption of this standard is not expected to have a material impact on the consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (ASU 2016-13). This update requires financial assets measured at amortized cost to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net income. Additionally, credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses, with the amount of the allowance limited to the amount by which the fair value is below the amortized cost. ASU 2016-13 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. The Company will adopt this standard effective January 1, 2023. The Company is currently evaluating the impact of this standard on the consolidated financial statements. In October 2021, the FASB issued ASU No 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08). This update requires contract assets and contract liabilities acquired in a business combination to be recognized and measured at the acquisition date in accordance with Accounting Standards Codification ("ASC") Topic 606 as if the acquirer had originated the contracts. ASU 2021-08 is effective for annual periods beginning after December 15, 2023, including interim periods within those fiscal years. The Company will adopt this standard effective January 1, 2024 on a prospective basis with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Cash and cash equivalents: Cash and cash equivalents consist of all cash accounts, money market investments, and investments with maturities, at the time of acquisition, of 90 days or less. These amounts are carried at cost, which approximates fair value. Although the Company maintains its cash accounts in a limited number of commercial banks, management of the Company believes it is not exposed to any significant credit risk on cash and short-term investments. Restricted cash of $407 and $4,085 represents fiduciary funds held for other companies as of December 31, 2021 and 2020, respectively. There is a corresponding obligation to the other companies included in accounts payable and accrued expenses as of December 31, 2021 and 2020 (Note 11). Investments: Investment securities, consisting of fixed maturities, are classified as available-for-sale and reported at fair value. The change in unrealized gain and loss on fixed maturity investments is recorded as a component of accumulated other comprehensive income in the consolidated balance sheets, net of the related deferred tax effect, until realized. The change in unrealized gain and loss on equity securities is recorded as a component of net income and is included in net investment income on the consolidated statements of operations. Realized gains and losses from the sale of available-for-sale securities are determined on a specific-identification basis and included in net realized gains (losses) on the consolidated statement of operations on the trade date. The Company amortizes any premium or discount on fixed maturities over the remaining maturity period of the related securities and reports the amortization in net investment income. Dividend and interest income is recognized when earned. The Company regularly reviews its investment portfolio to determine if other-than-temporary impairment exists for any debt securities. An investment is impaired when the fair value of the investment declines to an amount less than the cost or amortized cost of that investment. As part of the assessment process, the Company determines whether the impairment is temporary or other-than-temporary. The assessment is based on both quantitative criteria and qualitative information, considering a number of factors including, but not limited to: how long the security has been impaired; the amount of the impairment; or whether management intends to sell the debt security or it is more likely than not that management will have to sell the security before recovery of the amortized cost; the financial condition and near-term prospects of the issuer; whether the issuer is current on contractually-obligated interest and principal payments; key corporate events pertaining to the issuer and whether the market decline was affected by macroeconomic conditions. If a debt security is impaired and management intends to sell the security or it is more likely than not that the Company will have to sell the security before the amortized cost is recovered, then the Company recognizes impairment loss in net realized gains (losses). If it is determined that an impairment of a debt security is other-than-temporary and management neither intends to sell the security nor is it more likely than not that the Company will have to sell the security before it is able to recover its cost or amortized cost, then the Company separates the impairment into (a) the amount of impairment related to credit loss and (b) the amount of impairment related to all other factors. The Company records the amount of the impairment related to the credit loss as an impairment charge in net income and the amount of the impairment related to all other factors in accumulated other comprehensive income. No other-than-temporary impairment was recorded for the years ended December 31, 2021, 2020 and 2019. A large portion of the Company’s investment portfolio consists of fixed maturities which may be adversely affected by changes in interest rates as a result of governmental monetary policies, domestic and international economic and political conditions and other factors beyond the Company’s control. Equity method investments: Certain investments where the Company does not have control but has the ability to exercise significant influence are accounted for by the equity method of accounting. Under this method, the Company's investments in certain limited liability companies are recorded at cost and the investment accounts are adjusted for the Company's share of the entities' income or loss and for the distributions and contributions. The income and losses are recorded within equity earnings (losses) in affiliates, net of tax on the consolidated statements of operations. Premium revenue: Premiums are earned over the policy period and are stated after deduction for reinsurance. The portion of premiums that will be earned in the future is deferred and reported as unearned premiums on the consolidated balance sheets. Revenue from contracts with customers: Other revenue recorded by the Company includes brokerage, third-party administrative ("TPA"), management and consulting fees. The Company incurs certain costs associated with obtaining contracts with customers. Such contracts are one-year contracts and the amortization periods are one year or less. The Company has elected, as a practical expedient, to expense these contract costs as incurred. Brokerage revenue includes the fees earned on excess of loss ("XOL") and quota share reinsurance treaties. Billings for brokerage revenues generally occur monthly. Revenue for reinsurance treaties consists of a single performance obligation whereas the total amount of consideration expected to be received is recorded on the effective date of the underlying contract. For XOL treaties, revenue is estimated based on the contractually specified minimum or deposit premiums. For quota share treaties, revenue is estimated based on the projected premium income provided by the ceding insurer. Brokerage fees are received based on the performance of the specified terms of the reinsurance treaty and thus, are considered variable consideration. Therefore, revenue is estimated and constrained to the extent it is probable a significant reversal of revenue will not occur, using the expected value method. Adjustments to revenue are recorded as additional evidence is received for the ultimate amount of brokerage earned under the contract. The Company acts as a third-party claims administrator and earns TPA fees for providing such services. The fee structures vary based on the specific contract and can be dependent upon a number of factors which typically include agreed-upon fee rates, the total amount of premium written or collected under the agreement and the total time and expense incurred for processing claims. Billings for TPA fees occur on a monthly basis. TPA services consist of a single performance obligation which is recognized over time as claims are processed throughout the contract period. The volume of claims varies throughout the contract period and, therefore, the Company has elected to record revenue in an amount that reflects the total fees that the Company has a right to invoice for during the period. The Company acts as a managing general agent ("MGA") to provide certain administrative and underwriting services. The consideration received varies based on certain factors including the contractual MGA rate and the total amount of premium written or collected under the contract. Billings for management fees occur on a monthly basis. Management fees consist of a single performance obligation that are recognized by the Company over time as services are provided. The volume of premium written or collected for a single contract varies throughout the contract period and, therefore, the Company has elected to record revenue in an amount that reflects the total fees that the Company has a right to invoice for during the period. The Company provides consulting services for certain reinsurance contracts which includes services such as contract consultation and review. The compensation structure for consulting services is based on fixed periodic payments, generally monthly or quarterly. Consulting services consist of a single performance obligation which is recognized over the term of the consulting agreement. Deferred financing costs: Deferred financing costs are amortized as interest expense over the term of the underlying debt agreement by use of the effective interest method. Unamortized deferred financing costs are recorded as a reduction to long-term debt on the consolidated balance sheets. Premiums and other receivables: Premiums receivable are uncollateralized customer obligations due under normal terms requiring payment by the policy due date. Amounts outstanding that are deemed uncollectible are written off. When payments are received on amounts previously written off, the total premiums written off is reduced in the period in which the payment is received. Advanced premiums are recognized when payment is received prior to the beginning coverage date and are included within unearned premiums on the consolidated balance sheets. Premiums and other receivables consist of the following: December 31, 2021 2020 Premiums receivable $ 133,200 $ 106,708 Trade receivables 9,511 2,824 Notes receivable 12 51 Total premiums and other receivables 142,723 109,583 Less: Allowance for doubtful accounts (803) (366) Net premiums and other receivables $ 141,920 $ 109,217 The company recovered $177 of previously written off receivables during the year ended December 31, 2021 and wrote off $26 and $1,817 to bad debt during the years ended December 31, 2020 and 2019, respectively. Bad debt expense is included within general and administrative expenses in the consolidated statements of operations. Deferred policy acquisition costs: The Company incurs policy acquisition costs that vary with and are directly related to the production of new and renewal business. These costs consist of underwriting costs, net commissions (including ceding commissions) paid to agents, program managers and reinsurers, and premium taxes. Proceeds from reinsurance transactions that represent recovery of acquisition costs reduce applicable unamortized acquisition costs in such a manner that net acquisition costs are capitalized and charged to expense. Amortization of such policy acquisition costs is charged to general and administrative expense in proportion to premium earned over the estimated policy term. To the extent that unearned premiums on existing policies are not adequate to cover the sum of expected losses, unamortized acquisition costs and policy maintenance costs, unamortized deferred policy acquisition costs are expensed to eliminate the premium deficiency. If the premium deficiency is greater than the unamortized policy acquisition costs, a liability is recorded. No premium deficiency exists as of December 31, 2021 or 2020. Property and equipment, net: Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is based on the estimated useful lives of the various classes of property and equipment and is determined based on the straight-line method. The estimated useful lives of property and equipment range from three Asset class Depreciation period Building and building improvements 30 years Furniture and fixtures 7 years Office equipment 5 years Software and computer equipment 3 years Long-lived assets, such as property and equipment, and purchased intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset to be impaired, the Company recognizes impairment to the extent that the carrying value exceeds the asset’s fair value. Fair value is determined through various valuation techniques including, but not limited to, discounted cash flow models, quoted market values, and third-party independent appraisals. The Company recorded no impairments of property and equipment for the years ended December 31, 2021, 2020 and 2019. Reserve for unpaid loss and loss adjustment expenses: The liability for unpaid losses and LAE in the consolidated balance sheets represent the Company’s estimated losses incurred that remain unpaid as of the balance sheet date. The liability is recorded on an undiscounted basis. Reserves for unpaid losses include estimates for both claims that have been reported and those that have been incurred but not reported. The estimated losses are regularly reviewed and adjusted as necessary based on historical experience and as the Company obtains new information. The consolidated balance sheets include reserves of unpaid losses gross of the amounts related to unpaid losses recoverable from reinsurers. The consolidated statements of operations include the losses net of amounts ceded to reinsurers. Reinsurance: The Company cedes all, or a portion of, its insurance in order to limit its maximum losses, diversify its exposure and provide statutory surplus relief. Ceding insurance does not relieve the Company of its primary liability to policyholders. The reinsurance agreements are short-term, prospective contracts, typically 12-months in duration. The Company records an asset, prepaid reinsurance premiums, and a liability, reinsurance premiums payable, for the contract amount when premium is written under the reinsurance agreements. Prepaid reinsurance premiums are amortized in the same manner in which unearned premium is recognized. The Company earns ceding commissions on certain reinsurance contracts, which reduces operating expenses. Ceding commissions are amortized over the contract period consistent with deferred policy acquisition costs. The Company records amounts recoverable from reinsurers on paid losses and estimated amounts recoverable on unpaid losses. The estimate of amounts recoverable on unpaid losses is based on unpaid losses in conjunction with the reinsured policies. The Company estimates uncollectible amounts receivable from reinsurers based on an assessment of factors including the credit worthiness of the reinsurers and the adequacy of collateral obtained, where applicable. The Company recorded no bad debt expense related to reinsurance during the years ended December 31, 2021, 2020 and 2019. Guaranty funds: State guaranty associations assess insurance companies for the estimated loss resulting from insurers encountering financial difficulty. The Company records these assessments, as well as any return assessments, upon notification of the state guaranty associations. The effect on operations or financial position relating to any estimated losses are not material for the years ended December 31, 2021, 2020 and 2019. Income taxes: The Company recognizes deferred tax assets and liabilities for the future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. The Company measures deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which it is expected to recover or settle those temporary differences. Should a change in tax rates occur, the effect on deferred tax assets and liabilities will be recognized in operations in the period that includes the enactment date. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. The Company records any income tax penalties and income tax-related interest as income tax expense in the period incurred. The Company did not incur any material tax penalties or income-tax-related interest during the years ended December 31, 2021, 2020 and 2019. Concentrations of risk: The Company had total gross written premiums of $634,164, $484,249 and $411,401 for the years ended December 31, 2021, 2020 and 2019, respectively, including: Year Ended December 31, 2021 2020 2019 California $ 179,426 $ 203,421 $ 202,446 Texas 85,154 28,909 * Michigan 46,271 41,830 38,174 Florida 27,982 * * Arizona 26,272 27,950 34,215 Georgia 25,619 12,869 * Alabama 20,991 17,549 12,946 Pennsylvania 20,375 10,498 * Tennessee 15,966 12,347 8,065 Louisiana 14,124 * * Other geographical areas 171,984 128,876 115,555 Total gross written premium $ 634,164 $ 484,249 $ 411,401 * The amount for the state is relevant for 2021 but not in other periods and therefore, was not presented. As of December 31, 2021, approximately 22% and 29% of the Company’s investment portfolio was comprised of securities issued in industrial and public utility bonds and mortgage-backed securities, respectively, compared to 28% and 27% as of December 31, 2020, respectively. All of these securities are investment grade. This portfolio is widely diversified among various issuers and industries and does not depend on the economic stability of one issuer and industry. The Company, from time to time, maintains its cash position at banks in excess of federally insured limits. The Company has not experienced any losses on such accounts. Goodwill: Goodwill represents the cost to acquire a business over the fair value of the net assets acquired. Goodwill is not amortized but is reviewed for impairment at least annually or more frequently if events occur or circumstances change that would indicate that a triggering event for a potential impairment has occurred. The Company had $142,347 and $140,640 of goodwill on the consolidated balance sheets as of December 31, 2021 and 2020, respectively. An impairment loss would generally be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit. For the years ended December 31, 2021, 2020 and 2019, no impairment loss was recorded. Intangible assets: Acquired intangible assets include client relationships, customer lists, non-compete agreements and trade names acquired. Intangible assets with a finite life are amortized over the estimated useful life. In valuing these assets, assumptions are made regarding useful lives and projected growth rates and significant judgment is required. The Company periodically reviews identifiable intangibles for impairment as events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If the carrying amounts of the assets exceed their undiscounted cash flows, an impairment loss is recorded. For the years ended December 31, 2021, 2020 and 2019, no impairment loss was recorded. Segment reporting: Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker reviews financial information of the Company as a whole for purposes of assessing financial performance and making operating decisions. Accordingly, the Company considers itself to be operating as a single operating and reportable segment. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions Western Integrated Care Effective July 6, 2021, Trean Corp acquired 100% ownership of Western Integrated Care, LLC ("WIC") for a total purchase price of $5,500, which includes $1,500 that is contingent on WIC's future earnings, as defined in the agreement. WIC is a managed care organization that offers services to workers' compensation insurers to enable employees who are injured on the job to access qualified medical treatment. The following table summarizes the consideration paid and the amounts of estimated fair value of the net assets acquired and liabilities assumed at the acquisition date: Fair value of total consideration transferred $ 5,500 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents 205 Premiums and other receivables 1,025 Property and equipment, net 39 Right of use asset 135 Goodwill 1,707 Intangible assets, net 3,624 Other assets 16 Accounts payable and accrued expenses (873) Lease liability (135) Debt (243) Net assets acquired $ 5,500 The assessment of fair value, the determination of deferred taxes and other payables and receivables are preliminary and are based on the information that was available at the time the consolidated financial statements were prepared. Accordingly, the allocation of purchase price to intangible assets, goodwill, deferred tax assets, and liabilities and other payables and receivables is preliminary and, therefore, subject to adjustment in future periods. The Company recorded $1,707 of goodwill associated with the business combination. The goodwill recognized is attributable to the assembled workforce, the expected growth resulting from the acquisition, and synergies gained to assist in reducing operating expenses. The Company also recorded preliminary intangible assets totaling $3,624, which are comprised of the following: Useful Life Balance Trade name 2 years $ 28 Non-compete agreements 5 years 256 Customer relationships 12 years 3,340 Total intangible assets $ 3,624 The operating results of WIC have been included in the consolidated financial statements of the Company since July 6, 2021, the date of acquisition, and were immaterial to the consolidated financial statements. 7710 Insurance Company Effective October 1, 2020, Benchmark Holding Company acquired 100% ownership of 7710 Insurance Company as well as its associated program manager and agency, 7710 Service Company, LLC and Creekwood Insurance Agency, LLC for a purchase price of $12,140. 7710 Insurance Company underwrites workers' compensation primarily for emergency services, including firefighters and emergency medical services ("EMS"). 7710 Insurance Company focuses on reducing costs and claims through the implementation of a proprietary safety preparedness and loss control program, created and staffed by experienced firefighters and EMS professionals. The Company recorded $2,873 of goodwill associated with the business combination. The goodwill recognized is attributable to the assembled workforce and the expected growth resulting from the acquisition. The Company also recorded intangible assets totaling $3,299. Compstar Holding Company LLC Effective July 15, 2020, Trean Compstar Holdings LLC purchased the remaining 55% ownership interest in Compstar Holding Company LLC ("Compstar"), a holding company along with its wholly owned subsidiary Compstar Insurance Services, a managing general agent, by issuing 6,613,606 shares of the Company’s common stock with a market price of $15 per share on the date of acquisition. Prior to the acquisition date, the Company held a 45% ownership interest in Compstar and accounted for its investment under the equity method. As of the acquisition date, the fair value attributable to the Company’s previous equity interest was $81,167 and the carrying value was $11,321. As a result, the Company recorded a gain of $69,846 from the remeasurement of its previous equity interest, which is included in gain on revaluation of Compstar on the consolidated statement of operations. The acquisition-date fair value of the Company’s previous equity interest was revalued using the market price of the shares issued as consideration for the acquisition. The Company recorded $134,428 of goodwill associated with the business combination. The goodwill recognized is attributable to the assembled workforce, the expected growth resulting from the acquisition and synergies gained to assist in the reduction of operating expenses. The Company also recorded intangible assets totaling $73,954. LCTA Risk Services, Inc. Effective April 1, 2020, Trean Corp purchased 100% of the operating assets and assumed the liabilities of LCTA Risk Services, Inc. The total purchase price was $1,400. The Company recorded $517 of goodwill associated with the business combination. The goodwill recognized is attributable to the expected growth resulting from the acquisition and the synergies gained to assist in reducing operating expenses. The Company also recorded intangible assets totaling $482. American Liberty Insurance Company Effective March 31, 2019, Benchmark Holdings Company purchased the remaining 25% of outstanding voting shares in ALIC for $1,155. The purchase price was determined based on the statutory surplus of ALIC. First Choice Casualty Insurance Company Effective February 19, 2019, Benchmark purchased 100% of the operating assets and assumed the liabilities of First Choice Casualty Insurance Company ("FCCIC"). The total purchase price was $5,314. As part of the acquisition, the Company recorded a bargain purchase gain of $634 which is included in net realized gains (losses) on the consolidated statements of operations. The Company was able to realize a bargain purchase gain as the seller was looking to exit the workers' compensation market with the sale of their management agreement to a new manager. With the new manager, the seller had a lack of interest and expertise in maintaining workers' compensation policies, which had historically been underwritten and managed by Trean Corp. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company’s financial instruments include assets and liabilities carried at fair value. The inputs to valuation techniques used to measure fair value are prioritized into a three level hierarchy. The fair value hierarchy is as follows: Level 1 : Fair values primarily based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 : Fair values primarily based on observable inputs, other than quoted prices included in Level 1, or based on prices for similar assets and liabilities. Level 3 : Fair values primarily based on valuations derived when one or more of the significant inputs are unobservable. With little or no observable market, the determination of fair value uses considerable judgment and represents the Company’s best estimate of an amount that could be realized in a market exchange for the asset or liability. The Company classifies the financial asset or liability by level based upon the lowest level input that is significant to the determination of the fair value. The following tables present the estimated fair value of the Company’s significant financial instruments. December 31, 2021 Level 1 Level 2 Level 3 Total Fixed maturities: U.S. government and government securities $ 2,392 $ 39,042 $ — $ 41,434 Foreign governments — 2,490 — 2,490 States, territories and possessions — 10,766 — 10,766 Political subdivisions of states territories and possessions — 40,002 — 40,002 Special revenue and special assessment obligations — 95,991 — 95,991 Industrial and public utilities — 103,257 — 103,257 Commercial mortgage-backed securities — 118,218 — 118,218 Residential mortgage-backed securities — 17,368 — 17,368 Other loan-backed securities — 41,425 — 41,425 Hybrid securities — 110 — 110 Total fixed maturities 2,392 468,669 — 471,061 Equity securities: Preferred stock — 228 — 228 Common stock 741 — 741 Total equity securities — 969 — 969 Total investments $ 2,392 $ 469,638 $ — $ 472,030 Embedded derivatives on funds held under reinsurance agreements $ (4) $ 275 $ — $ 271 Debt $ — $ 30,938 $ — $ 30,938 December 31, 2020 Level 1 Level 2 Level 3 Total Fixed maturities: U.S. government and government securities $ 17,471 $ — $ — $ 17,471 Foreign governments — 302 — 302 States, territories and possessions — 7,774 — 7,774 Political subdivisions of states, territories and possessions — 33,212 — 33,212 Special revenue and special assessment obligations — 81,714 — 81,714 Industrial and public utilities — 113,741 — 113,741 Commercial mortgage-backed securities — 18,066 — 18,066 Residential mortgage-backed securities — 93,017 — 93,017 Other loan-backed securities — 39,945 — 39,945 Hybrid securities — 362 — 362 Total fixed maturities 17,471 388,133 — 405,604 Equity securities: Preferred stock — 240 — 240 Common stock 958 576 2,000 3,534 Total equity securities 958 816 2,000 3,774 Total investments $ 18,429 $ 388,949 $ 2,000 $ 409,378 Embedded derivatives on funds held under reinsurance agreements $ 176 $ 4,761 $ — $ 4,937 Debt $ — $ 32,381 $ — $ 32,381 Bonds and equity securities: The Company, through its third-party pricing service provider, uses a variety of sources to estimate the fair value of investments such as Refinitiv (formerly Reuters), PricingDirect, ICE Data Services, and for equities, Bloomberg or S&P Capital IQ Pro. Equity securities are generally valued at the closing price on the exchange on which they are primarily traded as provided by a third-party pricing service. Fixed income securities are generally valued at an evaluated bid as provided by a third-party pricing service. Securities and other assets generally valued using third-party pricing services may also be valued at broker/dealer indications. Values obtained from third-party pricing services can utilize several market data sources for inputs such as transaction data, yield, quality, coupon rate, maturity, issue type, trading characteristics and other market activity. To validate the reasonableness of the prices, the Company performs various qualitative and quantitative procedures such as analysis of recent trading activity, analytical review of fair values and an evaluation of the underlying pricing methodologies. Based on these procedures, the Company did not adjust the prices or quotes from the third-party pricing service. Embedded derivatives : The Company enters into funds held contracts under reinsurance agreements which create embedded derivatives on the underlying investments. These embedded derivatives are valued based upon the unrealized gain or loss position of the funds held portfolio, which is determined consistent with other investments using third-party pricing services. To validate the reasonableness of the quoted prices, the Company performs various qualitative and quantitative procedures such as analysis of recent activity, analytical review of fair values and an evaluation of the underlying pricing methodologies. Based on these procedures, the Company did not adjust the prices or quotes from the third-party pricing service. Debt: The Company holds debt related to its secured credit agreement. The Company has determined that the remaining balance of the debt reflected its fair value as this would represent the total amount to repay the debt. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | InvestmentsThe cost or amortized cost, gross unrealized gains, gross unrealized losses, and estimated fair value of the Company's investments are as follows: December 31, 2021 Cost or Gross Gross Fair Value Fixed maturities: U.S. government and government securities $ 41,490 $ 113 $ (169) $ 41,434 Foreign governments 2,500 — (10) 2,490 States, territories and possessions 10,593 189 (16) 10,766 Political subdivisions of states, territories and possessions 39,170 975 (143) 40,002 Special revenue and special assessment obligations 93,664 2,920 (593) 95,991 Industrial and public utilities 100,774 2,835 (352) 103,257 Commercial mortgage-backed securities 119,378 591 (1,751) 118,218 Residential mortgage-backed securities 16,549 843 (24) 17,368 Other loan-backed securities 41,236 248 (59) 41,425 Hybrid securities 105 5 — 110 Total fixed maturities available for sale 465,459 8,719 (3,117) 471,061 Equity securities: Preferred stock 243 — (15) 228 Common stock 741 — — 741 Total equity securities 984 — (15) 969 Total investments $ 466,443 $ 8,719 $ (3,132) $ 472,030 December 31, 2020 Cost or Gross Gross Fair Value Fixed maturities: U.S. government and government securities $ 17,135 $ 336 $ — $ 17,471 Foreign governments 300 2 — 302 States, territories and possessions 7,500 274 — 7,774 Political subdivisions of states, territories and possessions 31,759 1,453 — 33,212 Special revenue and special assessment obligations 77,329 4,422 (37) 81,714 Industrial and public utilities 107,017 6,768 (44) 113,741 Commercial mortgage-backed securities 16,242 1,848 (24) 18,066 Residential mortgage-backed securities 91,478 1,626 (87) 93,017 Other loan-backed securities 39,293 719 (67) 39,945 Hybrid securities 356 6 — 362 Total fixed maturities available for sale 388,409 17,454 (259) 405,604 Equity securities: Preferred stock 243 — (3) 240 Common stock 1,554 2,053 (73) 3,534 Total equity securities 1,797 2,053 (76) 3,774 Total investments $ 390,206 $ 19,507 $ (335) $ 409,378 The following table illustrates the Company’s gross unrealized losses and fair value of fixed maturities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position: December 31, 2021 Less Than 12 Months 12 Months or More Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Fixed maturities: U.S. government and government securities $ 26,935 $ (168) $ 23 $ (1) $ 26,958 $ (169) Foreign governments 2,490 (10) — — 2,490 (10) States, territories and possessions 935 (16) — — 935 (16) Political subdivisions of states, territories and possessions 11,115 (143) — — 11,115 (143) Special revenue and special assessment obligations 29,917 (593) — — 29,917 (593) Industrial and public utilities 24,042 (286) 1,058 (66) 25,100 (352) Commercial mortgage-backed securities 80,126 (1,565) 6,212 (186) 86,338 (1,751) Residential mortgage-backed securities 4,539 (24) — — 4,539 (24) Other loan-backed securities 20,153 (36) 2,477 (23) 22,630 (59) Hybrid securities — — — — — — Total bonds $ 200,252 $ (2,841) $ 9,770 $ (276) $ 210,022 $ (3,117) December 31, 2020 Less Than 12 Months 12 Months or More Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Fixed maturities: U.S. government and government securities $ 4,518 $ — $ — $ — $ 4,518 $ — Foreign governments — — — — — — States, territories and possessions — — — — — — Political subdivisions of states, territories and possessions — — — — — — Special revenue and special assessment obligations 2,923 (37) — — 2,923 (37) Industrial and public utilities 2,106 (44) — — 2,106 (44) Commercial mortgage-backed securities 999 (24) — — 999 (24) Residential mortgage-backed securities 8,811 (74) 262 (13) 9,073 (87) Other loan-backed securities 2,037 (10) 9,036 (57) 11,073 (67) Hybrid securities 250 — — — 250 — Total bonds $ 21,644 $ (189) $ 9,298 $ (70) $ 30,942 $ (259) The unrealized losses on the Company’s available for sale securities as of December 31, 2021 were primarily attributable to an increase in interest rates, which predominantly impacted fixed maturities acquired since the second quarter of 2020. The unrealized losses on the Company's available for sale securities as of December 31, 2020 were primarily attributable COVID-19 related credit spread widening and an increase in interest rates since first quarter 2020 lows, which predominantly impacted fixed maturities acquired during the second and third quarter of 2020. The amortized cost and estimated fair value of fixed maturities as of December 31, 2021, by contractual maturity, are as follows: Cost or Amortized Cost Fair Value Available for sale: Due in one year or less $ 29,108 $ 29,329 Due after one year but before five years 117,366 119,275 Due after five years but before ten years 78,967 81,217 Due after ten years 62,855 64,229 Commercial mortgage-backed securities 119,378 118,218 Residential mortgage-backed securities 16,549 17,368 Other loan-backed securities 41,236 41,425 Total $ 465,459 $ 471,061 Actual maturities may differ from contractual maturities as issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Realized gains and losses on investments included in the consolidated statements of operations for the years ended December 31, 2021, 2020 and 2019 are as follows: Year Ended December 31, 2021 2020 2019 Fixed maturities: Gains $ 153 $ 259 $ 91 Losses (94) (7) (24) Total fixed maturities 59 252 67 Funds held investments: Gains 112 — — Losses (10) — — Total funds held investments 102 — — Equity securities: Equity method investments: Gains — 3,115 — Losses (112) — — Total equity securities (112) 3,115 — Total net investment realized gains (losses) $ 49 $ 3,367 $ 67 Net investment income consists of the following for the years ended December 31, 2021, 2020, and 2019: Year Ended December 31, 2021 2020 2019 Fixed maturities $ 6,331 $ 6,271 $ 6,078 Income on funds held investments 2,338 3,345 3,322 Preferred stock 48 48 40 Common stock — 1,980 — Interest earned on cash and short-term investments 4 25 127 Net investment income $ 8,721 $ 11,669 $ 9,567 Embedded derivatives The Company enters into funds held contracts under reinsurance agreements which create embedded derivatives, which are measured at fair value. The embedded derivatives within our funds held under reinsurance agreements relate to a total return swap on the underlying investments. These embedded derivatives had no impact on total operating, investing and financing activities as presented on the Company’s consolidated statements of cash flows during the years ended December 31, 2021, 2020, and 2019. Total funds held under reinsurance agreements includes the following: December 31, 2021 2020 Funds held under reinsurance agreements, at cost $ 199,139 $ 169,767 Embedded derivatives, at fair value 271 4,937 Total funds held under reinsurance agreements $ 199,410 $ 174,704 Gains (losses) on embedded derivatives consists of the following for the years ended December 31, 2021, 2020, and 2019: Year Ended December 31, 2021 2020 2019 Change in fair value of embedded derivatives $ 4,666 $ (2,810) $ (3,999) Effect of net investment income on funds held investments (2,338) (3,345) (3,322) Effect of realized gains on funds held investments (102) — — Total gains (losses) on embedded derivatives $ 2,226 $ (6,155) $ (7,321) |
Equity Method Investments
Equity Method Investments | 12 Months Ended |
Dec. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method Investments The Company held equity method investments in Compstar, Trean Intermediaries ("TRI") and Stop-Loss Re, LLC ("Stop-Loss"). Equity earnings and losses are reported in equity earnings in affiliates, net of tax on the consolidated statements of operations. On July 15, 2020, the Company purchased the remaining 55% ownership interest in Compstar (See Note 3) and, as a result, Compstar is no longer recorded as an equity method investment. Prior to the acquisition, the Company owned 45% of Compstar which had a carrying value of approximately $11,831 as of December 31, 2019. The Company recorded earnings for the years ended December 31, 2020 and 2019 of 2,333 and $3,012, respectively. Distributions received from Compstar for the years ended December 31, 2020 and 2019 were $2,842 and $4,649, respectively. On January 3, 2020, the Company sold 15% of its previous 25% ownership in TRI for cash proceeds of $3,000, resulting in a remaining ownership interest of 10%. As a result of its significant ownership reduction and its lack of significant influence over the operations and policies of TRI, the Company reclassified its TRI investment, at fair value, to investments in common stock in the first quarter of 2020. The Company realized a gain on the sale of $3,115, which is included in net realized gains (losses) on the consolidated statements of operations. The Company subsequently re-measured its TRI investment shares resulting in an unrealized gain of $2,000 which is recorded in net investment income on the consolidated statement of operations. The Company sold all of its remaining ownership interest in TRI during Q3 2021 for $1,888, resulting in a realized loss of $112, which was included in net realized gains on the consolidated statement of operations. The Company recorded earnings for the year ended December 31, 2019 of $552. Distributions received from TRI for the years ended December 31, 2020 and 2019 were $225 and $840, respectively. Effective December 31, 2019, the Company surrendered its ownership in Stop-Loss. The Company recorded a loss on disposal of approximately $34 for the year ended December 31, 2019 which is included within net realized gains (losses) on the consolidated statements of operations. The Company’s losses for the years ended December 31, 2019 were approximately $6. Summarized financial information for the Company's equity method investments are as follows: 2021 2020 2019 Total assets * * $ 58,657 Total liabilities * * 42,980 Revenues * * 24,010 Net income (loss) * * 8,870 *2021 and 2020 amounts are not included as the Company no longer maintains an equity method investment in Compstar, TRI or Stop-Loss. |
Nonconsolidated Variable Intere
Nonconsolidated Variable Interest Entities | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nonconsolidated Variable Interest Entities | Nonconsolidated Variable Interest EntitiesIn 2019, the Company was engaged with certain entities that were deemed to be variable interest entities. A variable interest entity ("VIE") is an entity that has investors that lack certain essential characteristics of a controlling financial interest, such as a simple majority equity ownership or lacks sufficient funds to finance its own activities without financial support provided by other entities. The Company performs ongoing qualitative assessments of its VIEs to determine whether the Company has a controlling financial interest in the VIE and therefore is the primary beneficiary. The Company is deemed to have a controlling financial interest when it has both the ability to direct the activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. Based on the Company’s assessment, if it determines it is the primary beneficiary, the Company consolidates the VIE in the consolidated financial statements. The Company had a variable interest in Trean Capital Trust I (the "Trust") that had mandatory redeemable preferred securities outstanding with a liquidation value of $7,500. The Trust was a variable interest entity under current accounting guidance because the Company had limited ability to make decisions about its activities. However, the Company was not the primary beneficiary of the Trust; and therefore, the Trust and the mandatory redeemable preferred securities issued by the Trust are not reported on the Company’s consolidated balance sheets. During 2020, the Company redeemed all of the redeemable preferred securities of the Trust. As of December 31, 2020, the Trust is no longer considered a VIE. The Company had a variable interest in Compstar Holding Company LLC ("Compstar"), a limited liability company created for the purchase of an interest in Compstar Insurance Services, LLC, a California based general agent. Compstar was a variable interest entity under current accounting guidance because Compstar did not have sufficient capital at risk, as evidenced by a loan guarantee by a member. However, the Company was not the primary beneficiary of Compstar, and therefore, was not reported in the Company’s consolidated balance sheet as of December 31, 2019. During 2020, the Company purchased the remaining ownership interest in Compstar resulting in Compstar becoming a wholly-owned subsidiary of the Company. As of December 31, 2020, Compstar is no longer considered a VIE. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consists of the following: December 31, 2021 2020 Land $ 1,780 $ 1,780 Building and building improvements 5,755 5,755 Furniture and fixtures 1,137 1,106 Office equipment 2,898 2,813 Other property, plant and equipment 101 93 Deposits on fixed assets not placed in service 277 15 Total, at cost 11,948 11,562 Less: Accumulated depreciation (4,316) (3,308) Property and equipment, net $ 7,632 $ 8,254 Depreciation expense for the years ended December 31, 2021, 2020 and 2019 was $1,007, $912 and $830, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill Changes in the carrying value of goodwill are as follows: 2021 2020 Balance at beginning of period $ 140,640 $ 2,822 Acquisitions 1,707 137,818 Balance at end of period $ 142,347 $ 140,640 Intangible assets Intangible assets subject to amortization consist of the following: December 31, Useful Life 2021 2020 Non-compete agreement 2-5 years $ 300 $ 44 Trade name 2-15 years 3,710 3,682 Customer lists and relationships 10-14 years 77,624 74,284 Totals 81,634 78,010 Less: Accumulated amortization (8,520) (2,694) Intangible assets, net $ 73,114 $ 75,316 Amortization expense for the years ended December 31, 2021, 2020 and 2019 was $5,826, $2,573 and $46, respectively. The estimated future amortization of intangible assets is as follows: Trade name Customer lists Non-Compete Total 2022 $ 262 $ 5,684 $ 51 $ 5,997 2023 248 5,684 51 5,983 2024 241 5,683 51 5,975 2025 241 5,683 51 5,975 2026 241 5,683 26 5,950 Thereafter 2,065 41,169 — 43,234 Total $ 3,298 $ 69,586 $ 230 $ 73,114 |
Deferred Policy Acquisition Cos
Deferred Policy Acquisition Costs, Net | 12 Months Ended |
Dec. 31, 2021 | |
Insurance [Abstract] | |
Deferred Policy Acquisition Costs, Net | Deferred Policy Acquisition Costs, Net The Company defers costs incurred which are incremental and directly related to the successful acquisition of new or renewal insurance business, net of corresponding amounts of ceded reinsurance commissions. Net deferred policy acquisition costs are amortized in proportion to premium earned over the estimated policy term. The Company anticipates that its deferred policy acquisition costs will be fully recoverable and there were no premium deficiencies for the years ended December 31, 2021, 2020 and 2019. The table below depicts the activity with regard to deferred policy acquisition costs, net: 2021 2020 2019 Balance at beginning of period $ 1,332 $ 2,115 $ 2,976 Policy acquisition costs deferred 22,853 7,593 14,646 Amortization charged to expense (10,841) (8,376) (15,507) Balance at end of period $ 13,344 $ 1,332 $ 2,115 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consist of the following: December 31, 2021 2020 Accrued commissions and third-party administration fees $ 7,337 $ 5,391 Trade payables 4,765 2,823 Accrued taxes, licenses and fees 6,710 4,527 Accrued wages and employee benefits 4,873 4,092 Amounts retained for the accounts of others 1,619 41,655 Litigation settlement — 1,210 Other liabilities 4,144 1,542 Total $ 29,448 $ 61,240 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt consisted of the following: December 31, 2021 2020 Secured credit facility $ 30,938 $ 32,381 Less: unamortized deferred financing costs (576) (744) Net debt $ 30,362 $ 31,637 Secured Credit Facility In April 2018, Trean Corp entered into a credit agreement with a bank which included a term loan facility totaling $27,500 and a revolving credit facility of $3,000. On July 16, 2020, the Company entered into a new Second Amended and Restated Credit Agreement which, among other things, extended the Company's credit facility for a period of five years through May 26, 2025 and increased its term loan facility by $11,707 resulting in a total term loan debt amount of $33,000 and a revolving credit facility of $2,000 at the time of closing. The loan has a variable interest rate of LIBOR plus 4.50%, 4.50% and 3.00%, which was 4.64%, 4.72% and 6.33% as of December 31, 2021, 2020 and 2019, respectively. The outstanding principal balance of the loan is to be repaid in quarterly installments which escalate from $206 to $825. All equity securities of the subsidiaries of Trean Insurance Group, Inc. (other than Benchmark Holding Company and its subsidiaries) have been pledged as collateral. During the years ended December 31, 2021, 2020 and 2019, the Company recorded $1,517, $1,518 and $1,617 of interest expense, respectively, associated with its credit facility. The terms of the credit facility require the Company to maintain certain financial covenants and ratios. The Company was in compliance with all covenants and ratios as of December 31, 2021, 2020 and 2019. Junior Subordinated Debt In June 2006, the Trust issued 7,500 shares of preferred capital securities to qualified institutional buyers and 232 common securities to Trean Corp. The proceeds of such issuances were invested by the Trust in $7,732 aggregate principal amount of Trean Corp's Junior Subordinated Debt due 2036 (the Subordinated Notes). The Subordinated Notes represent the sole assets of the Trust. On October 7, 2020, Trean Corp redeemed all of the Subordinated Notes for a total payoff amount of $7,807. The interest rate was a fixed rate of 9.167% until July 7, 2011, after which a variable interest rate of LIBOR (1.99% as of December 31, 2019) plus 3.50% was in effect. The interest rate totaled 5.49% as of December 31, 2019. The preferred capital securities issued by the Trust in turn paid quarterly cash distributions at an annual rate of 9.167% per annum of the liquidation amount of $1 per security until July 7, 2011 and thereafter at a variable rate per annum, reset quarterly, equal to LIBOR plus 3.50%. During the years ended December 31, 2021, 2020 and 2019, the Company recorded $0, $271 and $464 of interest expense, respectively, associated with the Subordinated Notes. Oak Street Loan In conjunction with the acquisition of Compstar (See Note 3), the Company acquired a loan from Oak Street Funding with a total principle of $19,740. In July 2020, upon completion of the acquisition, the Company paid this loan off in full. PPP Loans In conjunction with the acquisition of Compstar, the Company acquired a Federal Paycheck Protection Program ("PPP Loan") with a principal balance of $325. The PPP Loan was forgiven on November 6, 2020. In conjunction with the acquisition of 7710, the Company acquired a PPP Loan with a principal balance of $269. The PPP Loan was forgiven on November 12, 2020. In conjunction with the acquisition of WIC, the Company acquired two PPP Loans with a principal balance of $243. As of December 31, 2021, both loans had been fully forgiven. Scheduled maturities of debt, excluding deferred financing costs, are as follows: 2022 $ 1,650 2023 2,888 2024 3,300 2025 23,100 Total debt $ 30,938 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Revenue from contracts with customers, included in other revenue, includes brokerage, management, third-party administrative, consulting and other fee-based revenue. Revenue from contracts with customers was $10,240 and $12,104 for the years ended December 31, 2021 and 2020, respectively. The following table presents the revenues recognized from contracts with customers included in the consolidated statements of operations. Year Ended December 31, 2021 2020 Brokerage $ 7,036 $ 8,994 Managing general agent fees 603 976 Third-party administrator fees 1,608 1,630 Consulting fees 993 504 Total revenue from contracts with customers $ 10,240 $ 12,104 The Company did not have any contract liabilities as of December 31, 2021 or December 31, 2020. The following table provides information related to the contract assets from contracts with customers. Contract assets are included within other assets on the consolidated balance sheets. December 31, 2021 2020 Contract assets $ 3,353 $ 3,405 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense is comprised of the following: Year Ended December 31, 2021 2020 2019 Current tax expense $ 7,823 $ 7,291 $ 8,642 Deferred tax expense (2,374) (1,056) (2,408) Total income tax expense $ 5,449 $ 6,235 $ 6,234 The income tax expense differs from the expected income tax expense computed by applying the applicable federal statutory tax rates to pretax income as a result of the following: 2021 Effective Rate 2020 Effective Rate 2019 Effective Rate Income tax expense computed at statutory rate $ 5,204 21.0 % $ 19,415 21.0 % $ 6,469 21.0 % State taxes, net of federal benefit 47 0.2 % 577 0.6 % 293 1.0 % Tax-exempt municipal income, net of proration (263) (1.1) % (272) (0.3) % (271) (0.9) % Nondeductible IPO & potential buyer expenses 10 — % 957 1.0 % 91 0.3 % Fair market value adjustment on Compstar investment — — % (14,668) (15.9) % — — % Other 451 1.9 % 226 0.3 % (348) (1.2) % Total income tax expense $ 5,449 22.0 % $ 6,235 6.7 % $ 6,234 20.2 % As of December 31, 2021 and 2020, the Company has net operating loss ("NOL") carryforwards for federal income tax purposes of approximately $3,272 related to the purchases of ALIC and FCCIC. Due to the purchases, the Company is limited to the amount of NOL Carryforward it can use each year. The Company estimates it can use approximately $1,676 of the available NOL carryforward over the next 18 years, and has established a deferred tax asset of approximately $41 and $118 as of December 31, 2021 and 2020, respectively. The significant components of deferred tax assets and liabilities are as follows: December 31, 2021 2020 Deferred tax assets: Unpaid losses and LAE $ 4,574 $ 3,180 Unearned premiums 3,802 2,101 NOL carryforward 41 118 Lease liability 1,188 1,789 Accrued liabilities 926 189 Stock compensation 484 120 Other 51 81 Total deferred tax assets 11,066 7,578 Deferred tax liabilities: Deferred acquisition costs (2,802) (259) Loss reserve discounting TCJA transitional adjustment (473) (591) Unrealized gains and losses on investments (1,131) (2,556) Property and equipment (191) (389) Right-of-use asset (1,082) (1,667) Intangible assets (12,715) (13,271) Unrealized gain on TRI investment — (474) Prepaid expenses (43) (352) Section 481(a) adjustment (56) (224) Other (93) (124) Total deferred tax liabilities (18,586) (19,907) Net deferred tax assets (liabilities) $ (7,520) $ (12,329) The Company completed its IRS examination related to the 2017 income tax return of Trean Corp. The results of the examination resulted in no changes to the 2017 Trean Corp tax return. The Company's tax years 2018 through 2020 remain open to examination by the IRS and various state authorities. As of December 31, 2021 and 2020, the Company has not taken any uncertain tax positions with regard to its tax returns. |
Liability for Unpaid Losses and
Liability for Unpaid Losses and Loss Adjustment Expense | 12 Months Ended |
Dec. 31, 2021 | |
Insurance [Abstract] | |
Liability for Unpaid Losses and Loss Adjustment Expense | Liability for Unpaid Losses and Loss Adjustment Expense The Company establishes reserves for unpaid losses and LAE which represent the estimated ultimate cost of all losses incurred that were both reported and unreported (i.e., incurred but not reported losses, or "IBNR") and LAE incurred that remain unpaid at the balance sheet date. The Company reserves for loss after considering all information known at each reporting period. At any given point in time, loss reserves represent the best estimate of the ultimate settlement and administration cost of insured claims incurred and unpaid. Since the process of estimating loss reserves requires significant judgment due to a number of variables, such as fluctuations in inflation, judicial decisions, legislative changes and changes in claims handling procedures, the ultimate liability will likely differ from these estimates. The Company revises the reserves for unpaid losses as additional information becomes available, and reflects adjustments, if any, in earnings in the periods in which the adjustments are deemed necessary. The liability for unpaid losses is recorded on an undiscounted basis. The following table represents a reconciliation of changes in the liability for unpaid losses and LAE. Year Ended December 31, 2021 2020 2019 Unpaid losses and LAE reserves at beginning of period $ 457,817 $ 406,716 $ 340,415 Less losses ceded through reinsurance (335,655) (304,005) (257,421) Net unpaid losses and LAE at beginning of period 122,162 102,711 82,994 Acquisition of subsidiary, net of losses ceded through reinsurance — 7,050 6,366 Incurred losses and LAE related to: Current period 136,191 65,587 54,933 Prior period (5,419) (14,813) (10,272) Total incurred losses and LAE 130,772 50,774 44,661 Paid losses and LAE, net of reinsurance, related to: Current period 42,484 15,411 11,852 Prior period 35,138 22,962 19,458 Total paid losses and LAE 77,622 38,373 31,310 Net unpaid losses and LAE at end of period 175,312 122,162 102,711 Plus losses ceded through reinsurance 369,008 335,655 304,005 Unpaid losses and LAE reserves at end of period $ 544,320 $ 457,817 $ 406,716 As a result of changes in estimates of insured events in prior years, the provision for unpaid losses and LAE decreased by approximately $5,419, $14,813 and $10,272 for the years ended December 31, 2021, 2020 and 2019, respectively. The Company purchased annuities from life insurers under which the claimants are the payees. The purchase of these annuities allowed the Company to reduce reserves for unpaid losses by approximately $2,553 in previous years. Under the terms of settlement with the claimants, the Company remains liable for payments to the claimants of approximately $1,661 and $1,717 as of December 31, 2021 and 2020, respectively, in the event of default or insolvency of the life insurers. Loss Development Tables The following tables represent cumulative incurred loss and allocated loss adjustment expenses, net of reinsurance by accident year and cumulative paid loss and allocated loss adjustment expenses, net of reinsurance by accident year, for the years ended December 31, 2012 to 2021, as well as total IBNR and the cumulative number of reported claims for the year ended December 31, 2021, by reportable line of business and accident year (dollars in thousands). The Company’s primary lines of business are workers’ compensation and other liability. Workers' Compensation Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance As of December 31, 2021 Years Ended December 31, Total of IBNR Liabilities Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021 2012 20,397 20,948 19,699 20,176 19,235 18,778 18,898 18,967 18,933 18,751 $ 809 3,189 2013 22,746 22,879 22,650 19,772 19,528 19,426 19,814 19,964 19,968 1,334 3,550 2014 22,357 20,686 19,781 19,394 17,967 18,025 18,049 17,584 1,484 3,558 2015 22,643 23,830 23,444 21,788 22,218 19,560 19,974 1,975 4,796 2016 30,710 29,261 27,674 25,430 23,063 23,076 1,891 9,849 2017 35,683 29,107 25,713 24,439 24,581 2,795 14,591 2018 40,122 34,478 34,321 31,909 3,922 12,524 2019 48,565 45,382 44,997 7,561 11,524 2020 55,960 55,531 11,949 11,983 2021 100,254 33,499 14,242 $ 356,625 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Years Ended December 31, Accident 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021 2012 6,100 11,854 14,292 15,902 16,683 17,426 17,951 18,164 18,329 18,363 2013 6,734 12,407 15,703 17,135 18,448 18,664 18,976 18,906 19,335 2014 5,958 11,672 14,393 16,011 16,177 16,535 16,607 16,707 2015 6,089 13,313 15,814 17,002 17,638 17,984 18,143 2016 7,260 15,329 17,904 18,728 19,856 20,551 2017 7,439 15,017 17,930 19,353 20,456 2018 8,978 19,811 24,023 26,201 2019 11,201 24,472 30,650 2020 12,141 30,646 2021 26,623 227,675 All outstanding liabilities before 2012, net of reinsurance 4,861 Liabilities for claims and claim adjustment expenses, net of reinsurance $ 133,811 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 27.6 % 32.6 % 14.8 % 8.6 % 4.5 % 3.6 % 2.2 % 1.5 % 1.8 % 0.5 % * Presented as unaudited required supplementary information Other Liability Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance As of December 31, 2021 Years Ended December 31, Total of IBNR Liabilities Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021 2012 1,442 880 973 863 1,092 1,278 1,745 1,721 1,717 1,796 $ 180 486 2013 1,914 1,876 1,617 1,580 1,804 2,068 1,651 1,667 1,703 340 369 2014 2,183 1,964 1,921 2,154 3,107 3,013 2,832 2,593 455 466 2015 2,946 2,652 2,862 3,549 3,334 2,860 2,523 696 511 2016 2,689 2,794 3,135 3,180 2,735 2,423 1,145 362 2017 4,964 3,089 4,555 3,966 3,267 1,609 343 2018 4,256 4,278 3,010 3,679 2,216 265 2019 5,457 2,849 3,608 3,110 128 2020 2,932 3,702 3,222 119 2021 4,362 3,238 137 $ 29,656 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Years Ended December 31, Accident 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021 2012 42 141 187 346 512 761 1,146 1,234 1,374 1,460 2013 65 195 281 573 798 1,048 1,153 1,215 1,282 2014 53 233 405 639 1,067 1,687 1,884 1,989 2015 123 374 600 945 1,187 1,258 1,523 2016 54 137 355 558 783 1,081 2017 52 439 676 999 1,387 2018 52 345 504 846 2019 111 170 239 2020 55 196 2021 719 10,722 All outstanding liabilities before 2012, net of reinsurance 225 Liabilities for claims and claim adjustment expenses, net of reinsurance $ 19,159 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 4.5 % 4.3 % 6.2 % 12.2 % 12.8 % 12.8 % 13.4 % 11.0 % 3.1 % 6.0 % * Presented as unaudited required supplementary information All Other Lines Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance As of December 31, 2021 Years Ended December 31, Total of IBNR Liabilities Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021 2012 18 3 25 14 4 2 3 2 1 1 $ — 479 2013 1 — 13 9 10 12 — — — — 572 2014 40 127 24 23 21 16 16 6 — 1,051 2015 168 132 108 113 98 98 19 — 1,167 2016 1,882 1,617 1,745 1,555 1,542 1,051 8 1,288 2017 2,852 2,917 2,417 2,442 1,935 2 2,128 2018 2,885 2,874 2,549 2,520 57 2,021 2019 3,756 3,367 3,219 169 1,434 2020 4,842 5,129 602 1,241 2021 23,365 4,412 3,911 $ 37,245 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Years Ended December 31, Accident 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021 2012 1 1 1 1 1 1 1 1 1 1 2013 — — — — — — — — — 2014 — 100 16 16 16 16 16 6 2015 63 98 98 99 98 98 19 2016 796 1,325 1,418 1,494 1,499 1,016 2017 1,412 2,099 2,203 2,321 1,884 2018 1,309 2,123 2,325 2,432 2019 1,903 2,532 2,789 2020 2,291 3,595 2021 11,093 22,835 All outstanding liabilities before 2012, net of reinsurance 71 Liabilities for claims and claim adjustment expenses, net of reinsurance $ 14,481 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 28.0 % 29.0 % 13.4 % 8.5 % 4.9 % 4.1 % 3.1 % 2.1 % 2.2 % 1.0 % * Presented as unaudited required supplementary information Total Lines Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance As of December 31, 2021 Years Ended December 31, Total of IBNR Liabilities Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021 2012 21,857 21,831 20,697 21,053 20,331 20,058 20,646 20,690 20,651 20,548 $ 989 4,154 2013 24,661 24,755 24,280 21,361 21,342 21,506 21,465 21,631 21,671 1,674 4,491 2014 24,580 22,777 21,726 21,571 21,095 21,054 20,897 20,183 1,939 5,075 2015 25,757 26,614 26,414 25,450 25,650 22,518 22,516 2,671 6,474 2016 35,281 33,672 32,554 30,165 27,340 26,550 3,044 11,499 2017 43,499 35,113 32,685 30,847 29,783 4,406 17,062 2018 47,263 41,630 39,880 38,108 6,195 14,810 2019 57,778 51,598 51,824 10,840 13,086 2020 63,734 64,362 15,773 13,343 2021 127,981 41,149 18,290 $ 423,526 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Years Ended December 31, Accident 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021 2012 6,143 11,996 14,480 16,249 17,196 18,188 19,098 19,399 19,704 19,824 2013 6,799 12,602 15,984 17,708 19,246 19,712 20,129 20,121 20,617 2014 6,011 12,005 14,814 16,666 17,260 18,238 18,507 18,702 2015 6,275 13,785 16,512 18,046 18,923 19,340 19,685 2016 8,110 16,791 19,677 20,780 22,138 22,648 2017 8,903 17,555 20,809 22,673 23,727 2018 10,339 22,279 26,852 29,479 2019 13,215 27,174 33,678 2020 14,487 34,437 2021 38,435 261,232 All outstanding liabilities before 2012, net of reinsurance 5,157 Liabilities for claims and claim adjustment expenses, net of reinsurance $ 167,451 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 28.0 % 29.0 % 13.4 % 8.5 % 4.9 % 4.1 % 3.1 % 2.1 % 2.2 % 1.0 % * Presented as unaudited required supplementary information The reconciliation of the net incurred and paid claims development tables to the liability for unpaid loss and loss adjustment expense in the consolidated balance sheets is as follows: December 31, 2021 2020 Net outstanding liabilities Workers' compensation $ 133,811 $ 94,116 Other liability 19,159 16,622 All other lines of business 14,481 3,842 Liabilities for unpaid loss and loss adjustment expense, net of reinsurance 167,451 114,580 Reinsurance recoverable on unpaid claims Workers' compensation 260,891 259,220 Other liability 50,765 43,592 All other lines of business 57,352 32,843 Total reinsurance recoverable on unpaid claims 369,008 335,655 Unallocated loss adjustment expenses 7,861 7,582 Total liability for unpaid loss and loss adjustment expenses $ 544,320 $ 457,817 |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2021 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | Reinsurance The Company utilizes reinsurance contracts to reduce its exposure to losses in all aspects of its insurance business. Such reinsurance permits recovery of a portion of losses from reinsurers, although it does not relieve the Company from its primary liability to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company evaluates the financial strength of potential reinsurers and continually monitors the financial condition of its reinsurers. Amounts recoverable from reinsurers are estimated based upon assumptions consistent with those used in establishing the liabilities related to the underlying reinsured contracts. The Company has diversified its credit risk related to the reinsurance ceded. There were no disputes with reinsurers as of December 31, 2021 and 2020. The Company has no reinsurance recoverables deemed uncollectible during the years ended December 31, 2021, 2020 and 2019. The Company holds collateral on a funds held basis or requires collateral in a trust or as a letter of credit to secure recoverable balances from reinsurers not authorized in the insurance carriers state of domicile as follows: December 31, 2021 2020 Letters of credit $ 24,979 $ 4,846 Trust 126,404 123,807 Funds held 156,401 143,528 Total $ 307,784 $ 272,181 Funds held in the table above represents only the portion of total funds held for which we require collateral to secure recoverable balances from reinsurers that are not authorized in the respective insurance carrier's state of domicile and does not include $43,009 and $31,176 of funds held for reinsurance companies that are authorized in the respective insurance carrier's state of domicile as of December 31, 2021 and 2020, respectively. The Company has unsecured aggregate recoverable for losses, paid and unpaid, loss adjustment expenses and unearned premiums with the following individual reinsurers, authorized or unauthorized, exceeding 5 percent of stockholders’ equity: December 31, 2021 2020 Arch Reins Co $ 22,050 $ 34,120 Markel Global Reins Co 66,933 77,222 A summary of the impact of ceded reinsurance is as follows: Year Ended December 31, 2021 2020 Gross Assumed Ceded Net Gross Assumed Ceded Net Losses and LAE liabilities $ 531,598 $ 12,722 $ (369,008) $ 175,312 $ 445,867 $ 11,950 $ (335,655) $ 122,162 Unearned premiums 216,878 3,062 (129,411) 90,529 155,404 2,583 (107,971) 50,016 Written premiums 624,769 9,395 (394,888) 239,276 476,342 7,907 (352,252) 131,997 Earned premiums 563,337 8,916 (373,573) 198,680 424,136 7,898 (323,567) 108,467 Loss and loss adjustment expenses 343,134 14,287 (226,649) 130,772 211,096 2,579 (162,901) 50,774 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Leases | Leases The Company's leases consist of operating leases for office space and equipment. The Company determines if an arrangement is a lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease right-of-use assets are recognized at commencement date based on the present value of lease payments over the lease term. As the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company has elected, as a practical expedient, to account for lease components and any non-lease components within a contract as a single lease component, and therefore allocates all of the expected lease payments to the lease component. Some of the Company's leases include options to extend the term, which is only included in the lease liability and right-of-use assets calculation when it is reasonably certain the Company will exercise that option. Our leases have remaining terms ranging from one month to 42 months, some of which have options to extend the lease for up to 5 years. As of December 31, 2021, the lease liability and right-of-use assets did not include the impact of any lease extension options as it is not reasonably certain that the Company will exercise the extension options. Total lease expense for the years ended December 31, 2021 and 2020 was $2,459 and $2,501, inclusive of $25 and $362 in variable lease expense, respectively. The Company also sublets some of its leased office space and recorded $100 and $84 of sublease income for the years ended December 31, 2021 and 2020, respectively, which is included in other income on the consolidated statements of operations. Total rent expense was $1,575 and sublease income was $90 for the year ended December 31, 2019, which was recorded prior to the adoption of ASU 2016-02. Supplemental balance sheet information, the weighted average remaining lease term and weighted average discount rate related to leases were as follows: December 31, December 31, (dollars in thousands) 2021 2020 Right of use asset $ 4,530 $ 6,338 Lease liability $ 4,976 $ 6,893 Weighted average remaining lease term 2.42 years 3.26 years Weighted average discount rate 6.33 % 6.37 % Future maturities of lease liabilities as of December 31, 2021 are as follows: Operating Leases 2022 $ 2,428 2023 1,846 2024 971 2025 102 2026 7 Thereafter — Total lease payments 5,354 Less: imputed interest (378) Total lease liabilities $ 4,976 |
Equity
Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Equity | Equity Initial Public Offering and Reorganization On July 20, 2020, Trean Insurance Group, Inc. closed the sale of 10,714,286 shares of its common stock in its IPO, comprised of 7,142,857 shares issued and sold by Trean Insurance Group, Inc. and 3,571,429 shares sold by selling stockholders. On July 22, 2020, Trean Insurance Group, Inc. closed the sale of an additional 1,207,142 shares by certain selling stockholders in the IPO pursuant to the exercise of the underwriters’ option to purchase additional shares to cover over-allotments. The IPO price per share was $15.00. The aggregate IPO price for all shares sold in the IPO was approximately $107,142 and the aggregate initial public offering price for all shares sold by the selling stockholders in the IPO was approximately $71,678. The shares began trading on the Nasdaq Global Select Market on July 16, 2020 under the symbol "TIG". The offer and sale was pursuant to a registration statement on Form S-1 (File No. 333-239291), which was declared effective by the SEC on July 15, 2020. Trean Insurance Group, Inc. received net proceeds from the sale of shares in the IPO of approximately $93,139 after deducting underwriting discounts and commissions of $7,500 and offering expenses of $6,503. Trean Insurance Group, Inc. did not receive any proceeds from the sale of shares by the selling stockholders. In addition, and in conjunction with its IPO, Trean Insurance Group, Inc. issued 6,613,606 shares of common stock, with a purchase price value of $99,204, to acquire the remaining 55% ownership in Compstar Holding Company LLC. See "Item 5 — Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities" for a detailed discussion of use of proceeds associated with the IPO. In conjunction with the IPO and corporate restructuring, the Company paid a termination payment to Altaris Capital Partners, LLC in connection with the termination of the Company's consulting and advisory agreements as well as paid bonuses to employees and pre-IPO unitholders for the successful completion of the IPO. The aggregate amount of these payments totaled $11,054 and is included in other expenses on the consolidated statement of operations. Prior to the completion of the above offering, the Company effected the following reorganization transactions: (i) each of Trean and BIC contributed all of their respective assets and liabilities to Trean Insurance Group, Inc., a newly formed direct subsidiary of BIC, in exchange for shares of common stock in Trean Insurance Group, Inc.; and (ii) upon the completion of the transfers by Trean and BIC, Trean and BIC were dissolved and distributed in-kind common shares to the pre-IPO unitholders. Common Stock The Company currently has authorized 600,000,000 shares of common stock with a par value of $0.01. As of December 31, 2021, and 2020 there were 51,176,887 and 51,148,782, respectively, shares of common stock issued and outstanding. Members' Equity Prior to the IPO, the Company had three classes of ownership units, each with its respective rights, preferences and privileges as follows: 1) Class A Units : Received an allocation of profits and losses incurred by the Company as well as maintained the right to receive distributions, along with Class B Units, on a pro rata basis prior to distributions made to other classes of ownership units. 2) Class B Units : Received an allocation of profits and losses incurred by the Company as well as maintained the right to receive distributions, along with Class A Units, on a pro rata basis prior to distributions made to other classes of ownership units. Class B maintained both voting and non-voting units. Each Class B Voting Unit is entitled to one vote per Class B Voting Unit on each matter to which the members are entitled to vote. Class B Non-Voting Units maintained all rights, preferences and privileges allowed to Class B Voting Units with the exception of voting rights. 3) Class C Units : Received an allocation of profits and losses incurred by the Company. Participating Class C Units maintained the right to receive distributions after any Class A or Class B units based on the unit holders’ pro rata share. As part of the corporate reorganization performed in conjunction with the IPO of Trean Insurance Group, all ownership units were exchanged for a total of 37,386,394 shares of the Company's common stock. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share ("EPS") is computed by dividing net income by the weighted average number of shares outstanding during reported periods. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock of the Company during reported periods and is calculated using the treasury stock method. As a result of the Company's IPO and corporate reorganization, the number of shares used to compute earnings per share for pre-reorganization 2019 periods presented was retrospectively adjusted to reflect the recapitalization in a manner akin to a split-like situation. The following table presents the calculation of basic and diluted EPS of common stock: Year Ended December 31, (in thousands, except share and per share amounts) 2021 2020 2019 Net income - basic and diluted $ 19,330 $ 88,549 $ 28,126 Weighted average number of shares outstanding - basic 51,162,293 43,744,003 37,386,394 Effect of dilutive securities: Restricted stock units 11,157 741 — Dilutive shares 11,157 741 — Weighted average number of shares outstanding - diluted 51,173,450 43,744,744 37,386,394 Excluded: Antidilutive common stock equivalents 39,808 89,920 0 Earnings per share: Basic $ 0.38 $ 2.02 $ 0.75 Diluted $ 0.38 $ 2.02 $ 0.75 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following table presents the changes in accumulated other comprehensive income for unrealized gains and losses on available-for-sale securities: Year Ended December 31, 2021 2020 2019 Balance at beginning of period $ 13,426 $ 6,500 $ (3,483) Other comprehensive income (loss), net of tax: Unrealized investment gains (losses): Unrealized investment gains (losses) arising during the period (11,386) 9,028 12,707 Income tax expense (benefit) (2,391) 1,903 2,671 Unrealized investment gains (losses), net of tax (8,995) 7,125 10,036 Less: reclassification adjustments to: Net realized investment gains included in net realized gains 59 252 67 Income tax expense 12 53 14 Total reclassifications included in net income, net of tax 47 199 53 Other comprehensive income (loss) (9,042) 6,926 9,983 Balance at end of period $ 4,384 $ 13,426 $ 6,500 |
Stock Compensation
Stock Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock Compensation | Stock Compensation As of December 31, 2021, the Company has one incentive plan, the Trean Insurance Group, Inc. 2020 Omnibus Incentive Plan, (the "2020 Omnibus Plan"). The purposes of the 2020 Omnibus Plan are to provide additional incentive to selected officers, employees, non-employee directors, independent contractors and consultants of the Company whose contributions are essential to the growth and success of the business of the Company and its affiliates, in order to strengthen the commitment and motivate such individuals to faithfully and diligently perform their responsibilities and attract competent and dedicated individuals whose efforts will result in the long-term growth and profitability of the Company and its affiliates. The 2020 Omnibus Plan is administered by the Company’s board of directors and provides for the issuance of up to 5,058,085 shares of the Company's common stock granted in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, stock bonuses, other stock awards or any combination of the foregoing. Stock Options Compensation expense is recognized for all stock compensation arrangements by the Company. Stock compensation expense related to stock option awards was $164 and $61 for the years ended December 31, 2021 and 2020. Employee stock option awards granted set forth, among other things, the option exercise price, the option term, provisions regarding option exercisability and whether the option is intended to be an incentive stock option ("ISO") or a nonqualified stock option ("NQSO"). Stock options may be granted to employees at such exercise prices as the Company’s board of directors may determine but not less than 100% of the fair market value of the underlying stock as of the date of grant. Employee options vest one third annually over a period of three years and have contractual terms of 10 years from the date of grant. The fair value of each time-based vesting option award is estimated on the date of grant using the Black-Scholes option pricing model that uses assumptions noted in the following table. The Company’s expected volatility for the period was based on a weighted average expected volatility of an industry peer group of insurance companies of similar size, life cycle and lines of business. Expected term is calculated using the simplified method taking into consideration the option's contractual life and vesting terms. The Company’s stock option grants qualify as plain vanilla options and as such the Company uses the simplified method in estimating its expected option term as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its common shares have been publicly traded. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Expected dividend yields were not used in the fair value computations as the Company has never declared or paid dividends on its common stock and currently intends to retain earnings for use in operations. 2021 2020 Expected volatility 29.8% 29.8% Expected term 6 years 6 years Risk-free interest rate 1.32% 0.47% A summary of the status of the Company's stock option activity as of December 31, 2021 and changes during the year then ended are as follows: Stock Options Weighted Average Exercise Price Balance outstanding, December 31, 2020 89,920 $ 15.00 Granted 60,729 $ 17.50 Forfeited or cancelled (30,462) $ 15.81 Balance outstanding, December 31, 2021 120,187 $ 16.06 Options exercisable, December 31, 2021 24,351 $ 15.00 The following table summarizes information regarding stock options outstanding as of December 31, 2021: Options Outstanding Options Vested or Expected to Vest Stock Options Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term Aggregate Intrinsic Value Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term Aggregate Intrinsic Value 2020 Omnibus Plan 120,187 $ 16.06 8.70 years $ — 120,187 $ 16.06 8.70 years $ — The weighted average grant-date fair value of options granted for the years ended December 31, 2021 and 2020 was $5.49 and $4.43. As of December 31, 2021, total unrecognized compensation cost related to stock options was $361 and is expected to be recognized over a weighted average period of approximately 1.1 years. Restricted Stock Units Compensation expense relating to restricted stock unit grants was $1,358 and $445 for the years ended December 31, 2021 and 2020. As of December 31, 2021 there was $3,202 of total unrecognized compensation cost related to non-vested restricted stock unit grants. That cost is expected to be recognized over a weighted average expected life of 2.1 years. The total fair value of restricted stock units vested during the years ended December 31, 2021 and 2020 was $498 and $174. The Company has granted time-based restricted stock units ("RSUs"), performance stock units ("PSUs"), and market-based stock units ("MSUs") to certain key employees as part of the Company's long-term incentive program. The estimated fair value of restricted stock units is based on the grant date closing price of the Company's stock for time-based and performance-based vesting awards. A Monte Carlo valuation model is used to estimate the fair value for market-based vesting awards. RSUs generally vest in three equal annual installments beginning one year from the grant date and are amortized as compensation expense over the three-year vesting period. The Company has also granted time-based restricted stock units to non-employee directors as part of the Company's annual director compensation program. Each time-based restricted stock grant to non-employee directors vests on the day immediately preceding the next annual meeting of stockholders following the date of grant. The grants are amortized as director compensation expense over the vesting period. The Company recognizes compensation expense on PSUs ratably over the requisite performance period of the award and to the extent management views the performance goal attainment as probable. The Company recognizes compensation expense on MSUs ratably over the requisite performance period of the award. For the 2021 fiscal year, the Company granted PSUs to certain key employees pursuant to the Company's 2020 Omnibus Plan. The number of shares earned is based on the Company’s achievement of pre-established target threshold goals for total gross written premiums over a three-year performance measurement period. The performance goals allow for a payout ranging from 0% to 200% of the target award. If performance satisfies minimum requirements to result in shares being awarded, the number of shares will be determined between 50% and 200% of target thresholds, as defined in the applicable award agreements. Any earned PSU will vest if the employee’s service has been continuous through the vesting date. Any PSU not earned because of failure to achieve the minimum performance goal at the end of the performance period will be immediately forfeited. The grant date fair value of the PSUs was determined based on the grant date closing price of the Company’s stock. For the 2021 fiscal year, the Company granted MSUs to certain key employees pursuant to the Company's 2020 Omnibus Plan. The number of restricted stock units earned is based on the Company’s cumulative total shareholder return ("TSR"), as defined in the applicable award agreement, over a three-year performance measurement period. If TSR satisfies minimum requirements to result in shares being awarded, the number of shares will be determined between 50% and 200% shown in the table below. Any MSU not earned because of failure to achieve the minimum performance goal at the end of the performance period will be immediately forfeited. Grant date fair values were determined using a Monte Carlo valuation model based on the following assumptions: Fiscal 2021 Total grant date fair value $845 Total grant date fair value per share $13.92 Expected volatility 35.0% Weighted average expected life 2.77 years Risk-free interest rate 0.27% The percent of the target MSU that will be earned based on the Company’s TSR is as follows: Cumulative TSR % Percent of Units Vested Below 25.1% —% 25.1% 50% 47.2% 100% 69.3% and above 200% A summary of the status of the Company’s non-vested restricted stock unit activity as of December 31, 2021 and changes during the year then ended is as follows: RSUs MSUs PSUs Total Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Non-vested outstanding, December 31, 2020 111,588 $ 14.99 — $ — — $ — 111,588 $ 14.99 Granted 74,669 $ 16.14 60,715 $ 13.92 121,458 $ 17.50 256,842 $ 16.26 Vested (34,686) $ 15.08 — $ — — $ — (34,686) $ 15.08 Forfeited or cancelled (34,462) $ 15.55 (9,854) $ 13.92 (19,710) $ 17.50 (64,026) $ 15.90 Non-vested outstanding, December 31, 2021 117,109 15.53 50,861 13.92 101,748 17.50 269,718 15.97 |
Regulatory Matters
Regulatory Matters | 12 Months Ended |
Dec. 31, 2021 | |
Regulated Operations [Abstract] | |
Regulatory Matters | Regulatory MattersU.S. state insurance laws and regulations prescribe accounting practices for determining statutory net income and capital and surplus for insurance companies. In addition, state regulators may permit statutory accounting practices that differ from prescribed practices. Statutory accounting practices prescribed or permitted by regulatory authorities for the Company’s insurance company subsidiaries, Benchmark, ALIC, 7710 & BSIC differ from GAAP. The principal differences between statutory accounting practices ("SAP") and GAAP as they relate to the financial statements of Benchmark, ALIC, 7710 and BSIC are (i) policy acquisition costs are expensed as incurred under SAP, whereas they are deferred and amortized under GAAP, (ii) deferred tax assets are subject to more limitations regarding what amounts can be recorded under SAP and (iii) bonds are recorded at amortized cost under SAP and fair value under GAAP. Benchmark is domiciled in Kansas, ALIC is domiciled in Utah, 7710 is domiciled in South Carolina and BSIC is domiciled in Arkansas. As of December 31, 2021 and 2020, and during the years then ended, Benchmark, ALIC, 7710 and BSIC met all regulatory requirements of the states in which they operate. Risk-based capital ("RBC") requirements as promulgated by the National Association of Insurance Commissioners ("NAIC") require property and casualty insurers to maintain minimum capitalization levels determined based on formulas incorporating various business risks (e.g. investment risk, underwriting profitability, etc.) of the insurance company subsidiaries. As of December 31, 2021 and 2020, the insurance company subsidiaries’ adjusted capital and surplus exceeded their authorized control level as determined by the NAIC’s risk-based capital models. Summarized statutory basis information, which differs from GAAP, is shown below for Benchmark, ALIC, 7710 and BSIC. 2021 (in thousands, except percentages) Benchmark ALIC 7710 BSIC Statutory capital and surplus $ 170,686 $ 6,321 $ 6,395 $ 19,977 RBC authorized control level 24,279 567 382 129 Statutory net income (loss) (782) 128 76 (23) RBC percentage 703 % 1115 % 1674 % 15486 % 2020 (in thousands, except percentages) Benchmark ALIC 7710 Statutory capital and surplus $ 173,241 $ 6,284 $ 6,370 RBC authorized control level 14,379 523 1,265 Statutory net income 20,475 111 519 RBC percentage 1205 % 1202 % 504 % The amount of dividends that our insurance subsidiaries may pay in any twelve-month period, without prior approval by their respective domestic insurance regulators, is restricted under the laws of Kansas, California, Utah, South Carolina and Arkansas. Under Kansas and California law, dividends payable from Benchmark without the prior approval of the applicable insurance commissioner must not exceed the greater of (i) 10% of Benchmark’s surplus as shown on the last statutory financial statement on file with the Kansas Insurance Department and the California Department of Insurance, respectively, or (ii) 100% of net income during the applicable twelve-month period (not including realized gains). Dividends shall not include pro rata distributions of any class of Benchmark's own securities. For the years ended December 31, 2021 and 2020 the Company could approve dividends without the approval of the state up to $20,474 and $23,475, respectively. The Kansas Insurance Department does not have any limitations on the total amount of dividends paid. Under Utah law, dividends payable from ALIC without the prior approval of the applicable insurance commissioner must not exceed the lesser of (i) 10% of ALIC’s surplus as shown on the last statutory financial statement on file with the Utah Insurance Department (ii) 100% of net income during the applicable twelve- month period (not including realized gains). Dividends shall not include pro rata distributions of any class of ALIC's own securities. For the years ended December 31, 2021 and 2020 the Company could approve dividends without the approval of the state up to $11 and $266, respectively. Under South Carolina law, dividends payable from 7710 without the prior approval of the applicable insurance commissioner are limited to the following during the preceding twelve months: (a) when paid from other than earned surplus must not exceed the lesser of: (i) 10% of 7710's surplus as regards policyholders as shown in 7710’s most recent annual statement; or (ii) the net income, not including net realized gains or losses as shown in the 7710's most recent annual statement; or (b) when paid from earned surplus must not exceed the greater of: (i) 10% of 7710's surplus as regards policyholders as shown in 7710’s most recent annual statement; or (ii) the net income, not including net realized gains or losses as shown in the 7710's most recent annual statement. Dividends shall not include pro rata distributions of any class of 7710’s own securities. For the year ended December 31, 2021 and 2020 the Company could approve dividends without the approval of the state up to $519 and $118, respectively. Under Arkansas law, dividends payable from BSIC without the prior approval of the applicable insurance commissioner must not exceed the lesser of (i) 10% of BSIC’s surplus as shown on the last statutory financial statement on file with the Arkansas Insurance Department; or (ii) 100% of net income during the applicable twelve- month period (not including realized gains). Dividends shall not include pro rata distributions of any class of BSIC's own securities. The insurance laws of Kansas require Benchmark to maintain minimum capital and surplus of $1,500. The insurance laws of Utah require ALIC to maintain minimum capital in the amount of $300. The insurance laws of South Carolina require 7710 to maintain minimum capital and surplus of $1,200. The insurance laws of Arkansas require BSIC to maintain minimum capital and surplus of $20,000. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Employee Benefit PlanThe Company has a 401(k) Plan and Trust. This Plan covers all eligible employees of the Company. An employee becomes eligible on the first day of each calendar quarter if they are at least 21 years old. Participants may elect to contribute from 1 percent up to 15 percent of their salary annually. The Company matches 50 percent of each dollar an employee contributes on the first 5 percent of compensation. In addition, under the safe-harbor plan, the Company contributes 3 percent of each participant's gross wages regardless of the employee's contributions. The Company may also make discretionary profit sharing contributions. The employees vest 25 percent per year of service beginning in the second full year of service. The Company contributed approximately $1,373, $942 and $721 to the plan for the years ended December 31, 2021, 2020 and 2019, respectively. |
Commitment and Contingencies
Commitment and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesFrom time to time, the Company is subject to litigation related to its insurance business. Management does not believe that the Company is a party to any such pending litigation that would have a material adverse effect on its future operations. |
Transactions with Related Parti
Transactions with Related Parties | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Transactions with Related Parties | Transactions with Related Parties In connection with our IPO, we entered into a director nomination agreement with the Altaris Funds, the Company's principal stockholder. So long as the Altaris Funds own 35% or more of our outstanding common stock, the Altaris Funds will have the right (but not the obligation) to nominate three individuals to our board of directors; so long as the Altaris Funds own 20% or more but less than 35% of our outstanding common stock, the Altaris Funds will have the right (but not the obligation) to nominate two individuals to our board of directors; and so long as the Altaris Funds own 10% or more but less than 20% of our outstanding common stock, the Altaris Funds will have the right (but not the obligation) to nominate one individual to our board of directors. Prior to the IPO, the Company paid a management fee to the Altaris Funds totaling $500 and $1,000 for the years ended December 31, 2020 and 2019, respectively, which is included in general and administrative expenses on the consolidated statement of operations. In conjunction with the IPO in 2020, the Company paid a termination fee to the Altaris Funds totaling $7,639, which is included in other expenses on the consolidated statement of operations. As of December 31, 2019, the Company owed the Altaris Funds $83, which is included within accounts payable and accrued expenses on the 2019 consolidated balance sheet. On July 6, 2021, Trean Corp purchased 100% ownership of WIC. Prior to the acquisition, WIC was partially owned by two employees of the Company. The total purchase price was $5,500, which includes $1,500 that is contingent on WIC's future earnings, as defined in the agreement. As of December 31, 2021, $1,500 of the total purchase price is outstanding and included within accounts payable and accrued expenses on the consolidated balance sheet. The Company recorded $200 of revenue for consulting services provided to TRI for each the years ended December 31, 2021, 2020 and 2019. Effective July 15, 2020, Trean Compstar Holdings LLC purchased the remaining ownership interest in Compstar (See Note 3). Prior to the acquisition, the Company owned a 45% interest in Compstar, a program manager that handles the underwriting, premium collection and servicing of insurance policies for the Company. The Company recorded $90,199 of gross earned premiums resulting in gross commissions of $17,709 for the year ended December 31, 2020 prior to the acquisition. The Company recorded $176,083 of gross earned premiums resulting in gross commissions of $37,034 due to Compstar for the year ended December 31, 2020. |
Schedule II. Condensed Financia
Schedule II. Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule II. Condensed Financial Information of Registrant | Schedule II. Condensed Financial Information of Registrant Trean Insurance Group, Inc. Condensed Balance Sheets (in thousands, except share data) December 31, 2021 2020 Assets Investment in subsidiaries $ 267,643 $ 252,607 Total investments 267,643 252,607 Cash and cash equivalents 4,242 683 Income taxes receivable 12,360 4,579 Intercompany receivables 135,369 152,643 Deferred tax asset 671 257 Other assets 1,930 — Total assets $ 422,215 $ 410,769 Liabilities Accounts payable and accrued expenses $ 306 $ 662 Total liabilities 306 662 Stockholders' equity Common stock, $0.01 par value per share (600,000,000 authorized; 51,176,887 and 51,148,782 issued and outstanding) 512 511 Additional paid-in capital 288,623 287,110 Retained earnings 128,390 109,060 Accumulated other comprehensive income 4,384 13,426 Total stockholders' equity 421,909 410,107 Total liabilities and stockholders' equity $ 422,215 $ 410,769 Schedule II. Condensed Financial Information of Registrant - (Continued) Trean Insurance Group, Inc. Condensed Statements of Operations (in thousands) Year Ended December 31, 2021 2020 Revenues Net investment income $ 9 $ — Other revenue — 300 Total revenue 9 300 Expenses General and administrative expenses 4,103 1,118 Other expenses 845 11,054 Noncash stock compensation 1,522 506 Interest expense — 299 Total expenses 6,470 12,977 Loss before taxes (6,461) (12,677) Income tax benefit (1,712) (1,993) Loss before equity earnings of subsidiaries (4,749) (10,684) Equity earnings of subsidiaries 24,079 99,233 Net income $ 19,330 $ 88,549 Schedule II. Condensed Financial Information of Registrant - (Continued) Trean Insurance Group, Inc. Condensed Statements of Cash Flows (in thousands) Year Ended December 31, 2021 2020 Operating activities Net income $ 19,330 $ 88,549 Adjustments to reconcile net income to net cash from operating activities: Stock compensation 1,522 506 Equity (earnings) losses in subsidiaries (24,079) (99,233) Deferred income taxes (414) (257) Changes in operating assets and liabilities: Premiums and other receivables — 300 Other assets (1,930) (665) Accounts payable and accrued expenses (357) 662 Income taxes payable (7,781) (4,579) Intercompany receivables 17,277 (7,099) Net cash provided by (used in) operating activities 3,568 (21,816) Investing activities Capital contributions to subsidiaries — (71,489) Net cash used for investing activities — (71,489) Financing activities Shares redeemed for payroll taxes (94) (82) Proceeds from short swing rule 85 — Proceeds from initial public offering — 99,643 Deferred offering costs — (5,839) Cash contributed in formation of the Company — 266 Net cash provided by (used in) financing activities (9) 93,988 Net increase in cash, cash equivalents and restricted cash 3,559 683 Cash, cash equivalents and restricted cash ‑ beginning of period 683 — Cash, cash equivalents and restricted cash ‑ end of period $ 4,242 $ 683 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Use of estimates | Use of estimates While preparing the consolidated financial statements, the Company has made certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements, as well as reported amounts of revenue and expenses during the reporting period. Accordingly, actual results could differ from those estimates. Reported amounts that require extensive use of estimates include the reserves for unpaid losses and loss adjustment expenses ("LAE"), reinsurance recoverables, investments, goodwill and intangible assets. Except for the captions on the consolidated balance sheets and consolidated and combined statements of comprehensive income, generally, the term loss(es) is used to collectively refer to both losses and LAE. |
Accounting pronouncements | Accounting pronouncements Recently adopted policies In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04). This update provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. This standard is effective for the period between March 12, 2020 and December 31, 2022. The adoption of this standard did not have a material impact on the consolidated financial statements. Pending policies The Company completed its IPO in July 2020, and is an emerging growth company as defined under federal securities laws. As such, the Company has elected to adopt pending accounting policies under the dates required for private companies. Therefore, the dates included within this section reflect the effective dates for the adoption of new accounting policies required by private companies. In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments (ASU 2020-03). This update represents changes to clarify and improve the codification to allow for easier application by eliminating inconsistencies and providing clarification on items such as (i) the application of fair value option disclosures; (ii) the accounting for fees related to modifications of debt; and (iii) aligning the contractual term of a net investment in a lease in accordance with ASC Topic 326, Financial Instruments - Credit Losses , and the lease term determined in accordance with ASC Topic 842, Leases . The Company adopted items (i) and (ii) effective January 1, 2020 and will adopt item (iii) on January 1, 2023. Adoption of this standard has not had, and is not expected to have, a material impact on the consolidated financial statements. In January 2020, the FASB issued ASU No. 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivative and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323 and Topic 815 (ASU 2020-01). This update addresses the accounting for certain equity securities upon the application or discontinuation of the equity method of accounting. Further, the update addresses scope considerations for forward contracts and purchased options on certain securities. ASU 2020-01 is effective for annual periods beginning after December 15, 2021, including interim periods thereafter. The Company will adopt this standard effective January 1, 2022. Adoption of this standard is not expected to have a material impact on the consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (ASU 2016-13). This update requires financial assets measured at amortized cost to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net income. Additionally, credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses, with the amount of the allowance limited to the amount by which the fair value is below the amortized cost. ASU 2016-13 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. The Company will adopt this standard effective January 1, 2023. The Company is currently evaluating the impact of this standard on the consolidated financial statements. In October 2021, the FASB issued ASU No 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08). This update requires contract assets and contract liabilities acquired in a business combination to be recognized and measured at the acquisition date in accordance with Accounting Standards Codification ("ASC") Topic 606 as if the acquirer had originated the contracts. ASU 2021-08 is effective for annual periods beginning after December 15, 2023, including interim periods within those fiscal years. The Company will adopt this standard effective January 1, 2024 on a prospective basis with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements. |
Cash and cash equivalents | Cash and cash equivalents: Cash and cash equivalents consist of all cash accounts, money market investments, and investments with maturities, at the time of acquisition, of 90 days or less. These amounts are carried at cost, which |
Investments | Investments: Investment securities, consisting of fixed maturities, are classified as available-for-sale and reported at fair value. The change in unrealized gain and loss on fixed maturity investments is recorded as a component of accumulated other comprehensive income in the consolidated balance sheets, net of the related deferred tax effect, until realized. The change in unrealized gain and loss on equity securities is recorded as a component of net income and is included in net investment income on the consolidated statements of operations. Realized gains and losses from the sale of available-for-sale securities are determined on a specific-identification basis and included in net realized gains (losses) on the consolidated statement of operations on the trade date. The Company amortizes any premium or discount on fixed maturities over the remaining maturity period of the related securities and reports the amortization in net investment income. Dividend and interest income is recognized when earned. The Company regularly reviews its investment portfolio to determine if other-than-temporary impairment exists for any debt securities. An investment is impaired when the fair value of the investment declines to an amount less than the cost or amortized cost of that investment. As part of the assessment process, the Company determines whether the impairment is temporary or other-than-temporary. The assessment is based on both quantitative criteria and qualitative information, considering a number of factors including, but not limited to: how long the security has been impaired; the amount of the impairment; or whether management intends to sell the debt security or it is more likely than not that management will have to sell the security before recovery of the amortized cost; the financial condition and near-term prospects of the issuer; whether the issuer is current on contractually-obligated interest and principal payments; key corporate events pertaining to the issuer and whether the market decline was affected by macroeconomic conditions. If a debt security is impaired and management intends to sell the security or it is more likely than not that the Company will have to sell the security before the amortized cost is recovered, then the Company recognizes impairment loss in net realized gains (losses). If it is determined that an impairment of a debt security is other-than-temporary and management neither intends to sell the security nor is it more likely than not that the Company will have to sell the security before it is able to recover its cost or amortized cost, then the Company separates the impairment into (a) the amount of impairment related to credit loss and (b) the amount of impairment related to all other factors. The Company records the amount of the impairment related to the credit loss as an impairment charge in net income and the amount of the impairment related to all other factors in accumulated other comprehensive income. No other-than-temporary impairment was recorded for the years ended December 31, 2021, 2020 and 2019. |
Equity method investments | Equity method investments: Certain investments where the Company does not have control but has the ability to exercise significant influence are accounted for by the equity method of accounting. Under this method, the Company's investments in certain limited liability companies are recorded at cost and the investment accounts are adjusted for the Company's share of the entities' income or loss and for the distributions and contributions. The income and losses are recorded within equity earnings (losses) in affiliates, net of tax on the consolidated statements of operations. |
Premium revenue | Premium revenue: Premiums are earned over the policy period and are stated after deduction for reinsurance. The portion of premiums that will be earned in the future is deferred and reported as unearned premiums on the consolidated balance sheets. |
Revenue from contracts with customers | Revenue from contracts with customers: Other revenue recorded by the Company includes brokerage, third-party administrative ("TPA"), management and consulting fees. The Company incurs certain costs associated with obtaining contracts with customers. Such contracts are one-year contracts and the amortization periods are one year or less. The Company has elected, as a practical expedient, to expense these contract costs as incurred. Brokerage revenue includes the fees earned on excess of loss ("XOL") and quota share reinsurance treaties. Billings for brokerage revenues generally occur monthly. Revenue for reinsurance treaties consists of a single performance obligation whereas the total amount of consideration expected to be received is recorded on the effective date of the underlying contract. For XOL treaties, revenue is estimated based on the contractually specified minimum or deposit premiums. For quota share treaties, revenue is estimated based on the projected premium income provided by the ceding insurer. Brokerage fees are received based on the performance of the specified terms of the reinsurance treaty and thus, are considered variable consideration. Therefore, revenue is estimated and constrained to the extent it is probable a significant reversal of revenue will not occur, using the expected value method. Adjustments to revenue are recorded as additional evidence is received for the ultimate amount of brokerage earned under the contract. The Company acts as a third-party claims administrator and earns TPA fees for providing such services. The fee structures vary based on the specific contract and can be dependent upon a number of factors which typically include agreed-upon fee rates, the total amount of premium written or collected under the agreement and the total time and expense incurred for processing claims. Billings for TPA fees occur on a monthly basis. TPA services consist of a single performance obligation which is recognized over time as claims are processed throughout the contract period. The volume of claims varies throughout the contract period and, therefore, the Company has elected to record revenue in an amount that reflects the total fees that the Company has a right to invoice for during the period. The Company acts as a managing general agent ("MGA") to provide certain administrative and underwriting services. The consideration received varies based on certain factors including the contractual MGA rate and the total amount of premium written or collected under the contract. Billings for management fees occur on a monthly basis. Management fees consist of a single performance obligation that are recognized by the Company over time as services are provided. The volume of premium written or collected for a single contract varies throughout the contract period and, therefore, the Company has elected to record revenue in an amount that reflects the total fees that the Company has a right to invoice for during the period. The Company provides consulting services for certain reinsurance contracts which includes services such as contract consultation and review. The compensation structure for consulting services is based on fixed periodic payments, generally monthly or quarterly. Consulting services consist of a single performance obligation which is recognized over the term of the consulting agreement. |
Deferred financing costs | Deferred financing costs: Deferred financing costs are amortized as interest expense over the term of the underlying debt agreement by use of the effective interest method. Unamortized deferred financing costs are recorded as a reduction to long-term debt on the consolidated balance sheets. |
Premiums and other receivables | Premiums and other receivables: Premiums receivable are uncollateralized customer obligations due under normal terms requiring payment by the policy due date. Amounts outstanding that are deemed uncollectible are written off. When payments are received on amounts previously written off, the total premiums written off is reduced in the period in which the payment is received. Advanced premiums are recognized when payment is received prior to the beginning coverage date and are included within unearned premiums on the consolidated balance sheets. |
Deferred policy acquisition costs | Deferred policy acquisition costs: The Company incurs policy acquisition costs that vary with and are directly related to the production of new and renewal business. These costs consist of underwriting costs, net commissions (including ceding commissions) paid to agents, program managers and reinsurers, and premium taxes. Proceeds from reinsurance transactions that represent recovery of acquisition costs reduce applicable unamortized acquisition costs in such a manner that net acquisition costs are capitalized and charged to expense. Amortization of such policy acquisition costs is charged to general and administrative expense in proportion to premium earned over the estimated policy term. To the extent that unearned premiums on existing policies are not adequate to cover the sum of expected losses, unamortized acquisition costs and policy maintenance costs, unamortized deferred policy acquisition costs are expensed to eliminate the premium deficiency. If the premium deficiency is greater than the unamortized policy acquisition costs, a liability is recorded. No premium deficiency exists as of December 31, 2021 or 2020. |
Property and equipment, net | Property and equipment, net: Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is based on the estimated useful lives of the various classes of property and equipment and is determined based on the straight-line method. The estimated useful lives of property and equipment range from three Asset class Depreciation period Building and building improvements 30 years Furniture and fixtures 7 years Office equipment 5 years Software and computer equipment 3 years |
Reserve for unpaid loss and loss adjustment expenses | Reserve for unpaid loss and loss adjustment expenses: The liability for unpaid losses and LAE in the consolidated balance sheets represent the Company’s estimated losses incurred that remain unpaid as of the balance sheet date. The liability is recorded on an undiscounted basis. Reserves for unpaid losses include estimates for both claims that have been reported and those that have been incurred but not reported. The estimated losses are regularly reviewed and adjusted as necessary based on historical experience and as the Company obtains new information. The consolidated balance sheets include reserves of unpaid losses gross of the amounts related to unpaid losses recoverable from reinsurers. The consolidated statements of operations include the losses net of amounts ceded to reinsurers. |
Reinsurance | Reinsurance: The Company cedes all, or a portion of, its insurance in order to limit its maximum losses, diversify its exposure and provide statutory surplus relief. Ceding insurance does not relieve the Company of its primary liability to policyholders. The reinsurance agreements are short-term, prospective contracts, typically 12-months in duration. The Company records an asset, prepaid reinsurance premiums, and a liability, reinsurance premiums payable, for the contract amount when premium is written under the reinsurance agreements. Prepaid reinsurance premiums are amortized in the same manner in which unearned premium is recognized. The Company earns ceding commissions on certain reinsurance contracts, which reduces operating expenses. Ceding commissions are amortized over the contract period consistent with deferred policy acquisition costs. The Company records amounts recoverable from reinsurers on paid losses and estimated amounts recoverable on unpaid losses. The estimate of amounts recoverable on unpaid losses is based on unpaid losses in conjunction with the reinsured policies. The Company estimates uncollectible amounts receivable from reinsurers based on an assessment of factors including the credit worthiness of the reinsurers and the adequacy of collateral obtained, where applicable. The Company recorded no bad debt expense related to reinsurance during the years ended December 31, 2021, 2020 and 2019. |
Income taxes | Income taxes: The Company recognizes deferred tax assets and liabilities for the future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. The Company measures deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which it is expected to recover or settle those temporary differences. Should a change in tax rates occur, the effect on deferred tax assets and liabilities will be recognized in operations in the period that includes the enactment date. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. The Company records any income tax penalties and income tax-related interest as income tax expense in the period incurred. The Company did not incur any material tax penalties or income-tax-related interest during the years ended December 31, 2021, 2020 and 2019. |
Concentration of risk | Concentrations of risk: The Company had total gross written premiums of $634,164, $484,249 and $411,401 for the years ended December 31, 2021, 2020 and 2019, respectively, including: Year Ended December 31, 2021 2020 2019 California $ 179,426 $ 203,421 $ 202,446 Texas 85,154 28,909 * Michigan 46,271 41,830 38,174 Florida 27,982 * * Arizona 26,272 27,950 34,215 Georgia 25,619 12,869 * Alabama 20,991 17,549 12,946 Pennsylvania 20,375 10,498 * Tennessee 15,966 12,347 8,065 Louisiana 14,124 * * Other geographical areas 171,984 128,876 115,555 Total gross written premium $ 634,164 $ 484,249 $ 411,401 * The amount for the state is relevant for 2021 but not in other periods and therefore, was not presented. As of December 31, 2021, approximately 22% and 29% of the Company’s investment portfolio was comprised of securities issued in industrial and public utility bonds and mortgage-backed securities, respectively, compared to 28% and 27% as of December 31, 2020, respectively. All of these securities are investment grade. This portfolio is widely diversified among various issuers and industries and does not depend on the economic stability of one issuer and industry. The Company, from time to time, maintains its cash position at banks in excess of federally insured limits. The Company has not experienced any losses on such accounts. |
Goodwill | Goodwill: Goodwill represents the cost to acquire a business over the fair value of the net assets acquired. Goodwill is not amortized but is reviewed for impairment at least annually or more frequently if events occur or circumstances change that would indicate that a triggering event for a potential impairment has occurred. The Company had $142,347 and $140,640 of goodwill on the consolidated balance sheets as of December 31, 2021 and 2020, respectively. An impairment loss would generally be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit. For the years ended December 31, 2021, 2020 and 2019, no impairment loss was recorded. |
Intangible assets | Intangible assets: Acquired intangible assets include client relationships, customer lists, non-compete agreements and trade names acquired. Intangible assets with a finite life are amortized over the estimated useful life. In valuing these assets, assumptions are made regarding useful lives and projected growth rates and significant judgment is required. The Company periodically reviews identifiable intangibles for impairment as events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If the carrying amounts of the assets exceed their undiscounted cash flows, an impairment loss is recorded. For the years ended December 31, 2021, 2020 and 2019, no impairment loss was recorded. |
Segment reporting | Segment reporting: Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker reviews financial information of the Company as a whole for purposes of assessing financial performance and making operating decisions. Accordingly, the Company considers itself to be operating as a single operating and reportable segment. |
Fair value measurements | Fair Value Measurements The Company’s financial instruments include assets and liabilities carried at fair value. The inputs to valuation techniques used to measure fair value are prioritized into a three level hierarchy. The fair value hierarchy is as follows: Level 1 : Fair values primarily based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 : Fair values primarily based on observable inputs, other than quoted prices included in Level 1, or based on prices for similar assets and liabilities. Level 3 : Fair values primarily based on valuations derived when one or more of the significant inputs are unobservable. With little or no observable market, the determination of fair value uses considerable judgment and represents the Company’s best estimate of an amount that could be realized in a market exchange for the asset or liability. The Company classifies the financial asset or liability by level based upon the lowest level input that is significant to the determination of the fair value. The following tables present the estimated fair value of the Company’s significant financial instruments. |
Business and Basis of Present_2
Business and Basis of Presentation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Impact of ASC 606 Adoption | The impact of the prior period corrections on the consolidated balance sheet and the related components of stockholders' equity was as follows: December 31, 2020 December 31, 2019 Previously reported Adjustment As adjusted Previously reported Adjustment As adjusted Retained earnings $ 112,959 $ (3,899) $ 109,060 $ 40,361 $ (1,679) $ 38,682 Accumulated other comprehensive income 9,527 3,899 13,426 4,821 1,679 6,500 December 31, 2018 Previously reported Adjustment As adjusted Retained earnings $ 9,779 $ 1,480 $ 11,259 Accumulated other comprehensive income (2,003) (1,480) (3,483) The impact of the prior period corrections on the consolidated statements of operations and other comprehensive income is as follows: Year Ended December 31, 2020 Previously reported Adjustment As adjusted Net investment income $ 8,324 $ 3,345 $ 11,669 Total revenue 202,106 3,345 205,451 Gains (losses) on embedded derivatives — (6,155) (6,155) Income before taxes 95,261 (2,810) 92,451 Income tax expense 6,825 (590) 6,235 Net income $ 90,769 $ (2,220) $ 88,549 Earnings per share: Basic $ 2.08 $ (0.06) $ 2.02 Diluted $ 2.07 $ (0.05) $ 2.02 Other comprehensive income, net of tax Unrealized investment gains: Unrealized investment gains arising during the period $ 6,218 $ 2,810 $ 9,028 Income tax expense 1,313 590 1,903 Unrealized investment gains, net of tax 4,905 2,220 7,125 Other comprehensive income $ 4,706 $ 2,220 $ 6,926 Year Ended December 31, 2019 Previously reported Adjustment As adjusted Net investment income $ 6,245 $ 3,322 $ 9,567 Total revenue 102,515 3,322 105,837 Gains (losses) on embedded derivatives — (7,321) (7,321) Income before taxes 34,801 (3,999) 30,802 Income tax expense 7,074 (840) 6,234 Net income $ 31,285 $ (3,159) $ 28,126 Earnings per share: Basic $ 0.84 $ (0.09) $ 0.75 Diluted $ 0.84 $ (0.09) $ 0.75 Other comprehensive income, net of tax Unrealized investment gains: Unrealized investment gains arising during the period $ 8,708 $ 3,999 $ 12,707 Income tax expense 1,831 840 2,671 Unrealized investment gains, net of tax 6,877 3,159 10,036 Other comprehensive income $ 6,824 $ 3,159 $ 9,983 |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Premiums and Other Receivables | Premiums and other receivables consist of the following: December 31, 2021 2020 Premiums receivable $ 133,200 $ 106,708 Trade receivables 9,511 2,824 Notes receivable 12 51 Total premiums and other receivables 142,723 109,583 Less: Allowance for doubtful accounts (803) (366) Net premiums and other receivables $ 141,920 $ 109,217 |
Summary of Property and Equipment | The depreciation periods by asset class are as follows: Asset class Depreciation period Building and building improvements 30 years Furniture and fixtures 7 years Office equipment 5 years Software and computer equipment 3 years Property and equipment consists of the following: December 31, 2021 2020 Land $ 1,780 $ 1,780 Building and building improvements 5,755 5,755 Furniture and fixtures 1,137 1,106 Office equipment 2,898 2,813 Other property, plant and equipment 101 93 Deposits on fixed assets not placed in service 277 15 Total, at cost 11,948 11,562 Less: Accumulated depreciation (4,316) (3,308) Property and equipment, net $ 7,632 $ 8,254 |
Schedules of Concentration of Risk, by Geography | The Company had total gross written premiums of $634,164, $484,249 and $411,401 for the years ended December 31, 2021, 2020 and 2019, respectively, including: Year Ended December 31, 2021 2020 2019 California $ 179,426 $ 203,421 $ 202,446 Texas 85,154 28,909 * Michigan 46,271 41,830 38,174 Florida 27,982 * * Arizona 26,272 27,950 34,215 Georgia 25,619 12,869 * Alabama 20,991 17,549 12,946 Pennsylvania 20,375 10,498 * Tennessee 15,966 12,347 8,065 Louisiana 14,124 * * Other geographical areas 171,984 128,876 115,555 Total gross written premium $ 634,164 $ 484,249 $ 411,401 * The amount for the state is relevant for 2021 but not in other periods and therefore, was not presented. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed | The following table summarizes the consideration paid and the amounts of estimated fair value of the net assets acquired and liabilities assumed at the acquisition date: Fair value of total consideration transferred $ 5,500 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents 205 Premiums and other receivables 1,025 Property and equipment, net 39 Right of use asset 135 Goodwill 1,707 Intangible assets, net 3,624 Other assets 16 Accounts payable and accrued expenses (873) Lease liability (135) Debt (243) Net assets acquired $ 5,500 |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class | The Company also recorded preliminary intangible assets totaling $3,624, which are comprised of the following: Useful Life Balance Trade name 2 years $ 28 Non-compete agreements 5 years 256 Customer relationships 12 years 3,340 Total intangible assets $ 3,624 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value Options | The following tables present the estimated fair value of the Company’s significant financial instruments. December 31, 2021 Level 1 Level 2 Level 3 Total Fixed maturities: U.S. government and government securities $ 2,392 $ 39,042 $ — $ 41,434 Foreign governments — 2,490 — 2,490 States, territories and possessions — 10,766 — 10,766 Political subdivisions of states territories and possessions — 40,002 — 40,002 Special revenue and special assessment obligations — 95,991 — 95,991 Industrial and public utilities — 103,257 — 103,257 Commercial mortgage-backed securities — 118,218 — 118,218 Residential mortgage-backed securities — 17,368 — 17,368 Other loan-backed securities — 41,425 — 41,425 Hybrid securities — 110 — 110 Total fixed maturities 2,392 468,669 — 471,061 Equity securities: Preferred stock — 228 — 228 Common stock 741 — 741 Total equity securities — 969 — 969 Total investments $ 2,392 $ 469,638 $ — $ 472,030 Embedded derivatives on funds held under reinsurance agreements $ (4) $ 275 $ — $ 271 Debt $ — $ 30,938 $ — $ 30,938 December 31, 2020 Level 1 Level 2 Level 3 Total Fixed maturities: U.S. government and government securities $ 17,471 $ — $ — $ 17,471 Foreign governments — 302 — 302 States, territories and possessions — 7,774 — 7,774 Political subdivisions of states, territories and possessions — 33,212 — 33,212 Special revenue and special assessment obligations — 81,714 — 81,714 Industrial and public utilities — 113,741 — 113,741 Commercial mortgage-backed securities — 18,066 — 18,066 Residential mortgage-backed securities — 93,017 — 93,017 Other loan-backed securities — 39,945 — 39,945 Hybrid securities — 362 — 362 Total fixed maturities 17,471 388,133 — 405,604 Equity securities: Preferred stock — 240 — 240 Common stock 958 576 2,000 3,534 Total equity securities 958 816 2,000 3,774 Total investments $ 18,429 $ 388,949 $ 2,000 $ 409,378 Embedded derivatives on funds held under reinsurance agreements $ 176 $ 4,761 $ — $ 4,937 Debt $ — $ 32,381 $ — $ 32,381 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Debt Securities, Available-for-sale | The cost or amortized cost, gross unrealized gains, gross unrealized losses, and estimated fair value of the Company's investments are as follows: December 31, 2021 Cost or Gross Gross Fair Value Fixed maturities: U.S. government and government securities $ 41,490 $ 113 $ (169) $ 41,434 Foreign governments 2,500 — (10) 2,490 States, territories and possessions 10,593 189 (16) 10,766 Political subdivisions of states, territories and possessions 39,170 975 (143) 40,002 Special revenue and special assessment obligations 93,664 2,920 (593) 95,991 Industrial and public utilities 100,774 2,835 (352) 103,257 Commercial mortgage-backed securities 119,378 591 (1,751) 118,218 Residential mortgage-backed securities 16,549 843 (24) 17,368 Other loan-backed securities 41,236 248 (59) 41,425 Hybrid securities 105 5 — 110 Total fixed maturities available for sale 465,459 8,719 (3,117) 471,061 Equity securities: Preferred stock 243 — (15) 228 Common stock 741 — — 741 Total equity securities 984 — (15) 969 Total investments $ 466,443 $ 8,719 $ (3,132) $ 472,030 December 31, 2020 Cost or Gross Gross Fair Value Fixed maturities: U.S. government and government securities $ 17,135 $ 336 $ — $ 17,471 Foreign governments 300 2 — 302 States, territories and possessions 7,500 274 — 7,774 Political subdivisions of states, territories and possessions 31,759 1,453 — 33,212 Special revenue and special assessment obligations 77,329 4,422 (37) 81,714 Industrial and public utilities 107,017 6,768 (44) 113,741 Commercial mortgage-backed securities 16,242 1,848 (24) 18,066 Residential mortgage-backed securities 91,478 1,626 (87) 93,017 Other loan-backed securities 39,293 719 (67) 39,945 Hybrid securities 356 6 — 362 Total fixed maturities available for sale 388,409 17,454 (259) 405,604 Equity securities: Preferred stock 243 — (3) 240 Common stock 1,554 2,053 (73) 3,534 Total equity securities 1,797 2,053 (76) 3,774 Total investments $ 390,206 $ 19,507 $ (335) $ 409,378 |
Schedule of Continuous Unrealized Loss Position | The following table illustrates the Company’s gross unrealized losses and fair value of fixed maturities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position: December 31, 2021 Less Than 12 Months 12 Months or More Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Fixed maturities: U.S. government and government securities $ 26,935 $ (168) $ 23 $ (1) $ 26,958 $ (169) Foreign governments 2,490 (10) — — 2,490 (10) States, territories and possessions 935 (16) — — 935 (16) Political subdivisions of states, territories and possessions 11,115 (143) — — 11,115 (143) Special revenue and special assessment obligations 29,917 (593) — — 29,917 (593) Industrial and public utilities 24,042 (286) 1,058 (66) 25,100 (352) Commercial mortgage-backed securities 80,126 (1,565) 6,212 (186) 86,338 (1,751) Residential mortgage-backed securities 4,539 (24) — — 4,539 (24) Other loan-backed securities 20,153 (36) 2,477 (23) 22,630 (59) Hybrid securities — — — — — — Total bonds $ 200,252 $ (2,841) $ 9,770 $ (276) $ 210,022 $ (3,117) December 31, 2020 Less Than 12 Months 12 Months or More Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Fixed maturities: U.S. government and government securities $ 4,518 $ — $ — $ — $ 4,518 $ — Foreign governments — — — — — — States, territories and possessions — — — — — — Political subdivisions of states, territories and possessions — — — — — — Special revenue and special assessment obligations 2,923 (37) — — 2,923 (37) Industrial and public utilities 2,106 (44) — — 2,106 (44) Commercial mortgage-backed securities 999 (24) — — 999 (24) Residential mortgage-backed securities 8,811 (74) 262 (13) 9,073 (87) Other loan-backed securities 2,037 (10) 9,036 (57) 11,073 (67) Hybrid securities 250 — — — 250 — Total bonds $ 21,644 $ (189) $ 9,298 $ (70) $ 30,942 $ (259) |
Summary of Investments by Contractual Maturity | The amortized cost and estimated fair value of fixed maturities as of December 31, 2021, by contractual maturity, are as follows: Cost or Amortized Cost Fair Value Available for sale: Due in one year or less $ 29,108 $ 29,329 Due after one year but before five years 117,366 119,275 Due after five years but before ten years 78,967 81,217 Due after ten years 62,855 64,229 Commercial mortgage-backed securities 119,378 118,218 Residential mortgage-backed securities 16,549 17,368 Other loan-backed securities 41,236 41,425 Total $ 465,459 $ 471,061 |
Sumnary of Realized Gain (Loss) on Investments | Realized gains and losses on investments included in the consolidated statements of operations for the years ended December 31, 2021, 2020 and 2019 are as follows: Year Ended December 31, 2021 2020 2019 Fixed maturities: Gains $ 153 $ 259 $ 91 Losses (94) (7) (24) Total fixed maturities 59 252 67 Funds held investments: Gains 112 — — Losses (10) — — Total funds held investments 102 — — Equity securities: Equity method investments: Gains — 3,115 — Losses (112) — — Total equity securities (112) 3,115 — Total net investment realized gains (losses) $ 49 $ 3,367 $ 67 |
Summary of Net Investment Income | Net investment income consists of the following for the years ended December 31, 2021, 2020, and 2019: Year Ended December 31, 2021 2020 2019 Fixed maturities $ 6,331 $ 6,271 $ 6,078 Income on funds held investments 2,338 3,345 3,322 Preferred stock 48 48 40 Common stock — 1,980 — Interest earned on cash and short-term investments 4 25 127 Net investment income $ 8,721 $ 11,669 $ 9,567 |
Schedule Of Funds Held Under Reinsurance Agreements | Total funds held under reinsurance agreements includes the following: December 31, 2021 2020 Funds held under reinsurance agreements, at cost $ 199,139 $ 169,767 Embedded derivatives, at fair value 271 4,937 Total funds held under reinsurance agreements $ 199,410 $ 174,704 |
Embedded Derivatives, Gain (Loss) | Gains (losses) on embedded derivatives consists of the following for the years ended December 31, 2021, 2020, and 2019: Year Ended December 31, 2021 2020 2019 Change in fair value of embedded derivatives $ 4,666 $ (2,810) $ (3,999) Effect of net investment income on funds held investments (2,338) (3,345) (3,322) Effect of realized gains on funds held investments (102) — — Total gains (losses) on embedded derivatives $ 2,226 $ (6,155) $ (7,321) |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summarized Financial Information | Summarized financial information for the Company's equity method investments are as follows: 2021 2020 2019 Total assets * * $ 58,657 Total liabilities * * 42,980 Revenues * * 24,010 Net income (loss) * * 8,870 *2021 and 2020 amounts are not included as the Company no longer maintains an equity method investment in Compstar, TRI or Stop-Loss. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | The depreciation periods by asset class are as follows: Asset class Depreciation period Building and building improvements 30 years Furniture and fixtures 7 years Office equipment 5 years Software and computer equipment 3 years Property and equipment consists of the following: December 31, 2021 2020 Land $ 1,780 $ 1,780 Building and building improvements 5,755 5,755 Furniture and fixtures 1,137 1,106 Office equipment 2,898 2,813 Other property, plant and equipment 101 93 Deposits on fixed assets not placed in service 277 15 Total, at cost 11,948 11,562 Less: Accumulated depreciation (4,316) (3,308) Property and equipment, net $ 7,632 $ 8,254 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in the carrying value of goodwill are as follows: 2021 2020 Balance at beginning of period $ 140,640 $ 2,822 Acquisitions 1,707 137,818 Balance at end of period $ 142,347 $ 140,640 |
Schedule of Finite-Lived Intangible Assets | Intangible assets subject to amortization consist of the following: December 31, Useful Life 2021 2020 Non-compete agreement 2-5 years $ 300 $ 44 Trade name 2-15 years 3,710 3,682 Customer lists and relationships 10-14 years 77,624 74,284 Totals 81,634 78,010 Less: Accumulated amortization (8,520) (2,694) Intangible assets, net $ 73,114 $ 75,316 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated future amortization of intangible assets is as follows: Trade name Customer lists Non-Compete Total 2022 $ 262 $ 5,684 $ 51 $ 5,997 2023 248 5,684 51 5,983 2024 241 5,683 51 5,975 2025 241 5,683 51 5,975 2026 241 5,683 26 5,950 Thereafter 2,065 41,169 — 43,234 Total $ 3,298 $ 69,586 $ 230 $ 73,114 |
Deferred Policy Acquisition C_2
Deferred Policy Acquisition Costs, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Insurance [Abstract] | |
Summary of Deferred Policy Acquisition Costs | The table below depicts the activity with regard to deferred policy acquisition costs, net: 2021 2020 2019 Balance at beginning of period $ 1,332 $ 2,115 $ 2,976 Policy acquisition costs deferred 22,853 7,593 14,646 Amortization charged to expense (10,841) (8,376) (15,507) Balance at end of period $ 13,344 $ 1,332 $ 2,115 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consist of the following: December 31, 2021 2020 Accrued commissions and third-party administration fees $ 7,337 $ 5,391 Trade payables 4,765 2,823 Accrued taxes, licenses and fees 6,710 4,527 Accrued wages and employee benefits 4,873 4,092 Amounts retained for the accounts of others 1,619 41,655 Litigation settlement — 1,210 Other liabilities 4,144 1,542 Total $ 29,448 $ 61,240 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consisted of the following: December 31, 2021 2020 Secured credit facility $ 30,938 $ 32,381 Less: unamortized deferred financing costs (576) (744) Net debt $ 30,362 $ 31,637 |
Schedule of Maturities of Debt | Scheduled maturities of debt, excluding deferred financing costs, are as follows: 2022 $ 1,650 2023 2,888 2024 3,300 2025 23,100 Total debt $ 30,938 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Disaggregation of Revenue | The following table presents the revenues recognized from contracts with customers included in the consolidated statements of operations. Year Ended December 31, 2021 2020 Brokerage $ 7,036 $ 8,994 Managing general agent fees 603 976 Third-party administrator fees 1,608 1,630 Consulting fees 993 504 Total revenue from contracts with customers $ 10,240 $ 12,104 |
Schedule of Contract with Customer, Contract Assets | Contract assets are included within other assets on the consolidated balance sheets. December 31, 2021 2020 Contract assets $ 3,353 $ 3,405 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Income tax expense is comprised of the following: Year Ended December 31, 2021 2020 2019 Current tax expense $ 7,823 $ 7,291 $ 8,642 Deferred tax expense (2,374) (1,056) (2,408) Total income tax expense $ 5,449 $ 6,235 $ 6,234 |
Schedule of Effective Income Tax Rate Reconciliation | The income tax expense differs from the expected income tax expense computed by applying the applicable federal statutory tax rates to pretax income as a result of the following: 2021 Effective Rate 2020 Effective Rate 2019 Effective Rate Income tax expense computed at statutory rate $ 5,204 21.0 % $ 19,415 21.0 % $ 6,469 21.0 % State taxes, net of federal benefit 47 0.2 % 577 0.6 % 293 1.0 % Tax-exempt municipal income, net of proration (263) (1.1) % (272) (0.3) % (271) (0.9) % Nondeductible IPO & potential buyer expenses 10 — % 957 1.0 % 91 0.3 % Fair market value adjustment on Compstar investment — — % (14,668) (15.9) % — — % Other 451 1.9 % 226 0.3 % (348) (1.2) % Total income tax expense $ 5,449 22.0 % $ 6,235 6.7 % $ 6,234 20.2 % |
Schedule of Deferred Tax Assets and Liabilities | The significant components of deferred tax assets and liabilities are as follows: December 31, 2021 2020 Deferred tax assets: Unpaid losses and LAE $ 4,574 $ 3,180 Unearned premiums 3,802 2,101 NOL carryforward 41 118 Lease liability 1,188 1,789 Accrued liabilities 926 189 Stock compensation 484 120 Other 51 81 Total deferred tax assets 11,066 7,578 Deferred tax liabilities: Deferred acquisition costs (2,802) (259) Loss reserve discounting TCJA transitional adjustment (473) (591) Unrealized gains and losses on investments (1,131) (2,556) Property and equipment (191) (389) Right-of-use asset (1,082) (1,667) Intangible assets (12,715) (13,271) Unrealized gain on TRI investment — (474) Prepaid expenses (43) (352) Section 481(a) adjustment (56) (224) Other (93) (124) Total deferred tax liabilities (18,586) (19,907) Net deferred tax assets (liabilities) $ (7,520) $ (12,329) |
Liability for Unpaid Losses a_2
Liability for Unpaid Losses and Loss Adjustment Expense (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Insurance [Abstract] | |
Schedule of Liability for Unpaid Losses and Loss Adjustment Expense | The following table represents a reconciliation of changes in the liability for unpaid losses and LAE. Year Ended December 31, 2021 2020 2019 Unpaid losses and LAE reserves at beginning of period $ 457,817 $ 406,716 $ 340,415 Less losses ceded through reinsurance (335,655) (304,005) (257,421) Net unpaid losses and LAE at beginning of period 122,162 102,711 82,994 Acquisition of subsidiary, net of losses ceded through reinsurance — 7,050 6,366 Incurred losses and LAE related to: Current period 136,191 65,587 54,933 Prior period (5,419) (14,813) (10,272) Total incurred losses and LAE 130,772 50,774 44,661 Paid losses and LAE, net of reinsurance, related to: Current period 42,484 15,411 11,852 Prior period 35,138 22,962 19,458 Total paid losses and LAE 77,622 38,373 31,310 Net unpaid losses and LAE at end of period 175,312 122,162 102,711 Plus losses ceded through reinsurance 369,008 335,655 304,005 Unpaid losses and LAE reserves at end of period $ 544,320 $ 457,817 $ 406,716 |
Summary of Loss Development | The following tables represent cumulative incurred loss and allocated loss adjustment expenses, net of reinsurance by accident year and cumulative paid loss and allocated loss adjustment expenses, net of reinsurance by accident year, for the years ended December 31, 2012 to 2021, as well as total IBNR and the cumulative number of reported claims for the year ended December 31, 2021, by reportable line of business and accident year (dollars in thousands). The Company’s primary lines of business are workers’ compensation and other liability. Workers' Compensation Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance As of December 31, 2021 Years Ended December 31, Total of IBNR Liabilities Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021 2012 20,397 20,948 19,699 20,176 19,235 18,778 18,898 18,967 18,933 18,751 $ 809 3,189 2013 22,746 22,879 22,650 19,772 19,528 19,426 19,814 19,964 19,968 1,334 3,550 2014 22,357 20,686 19,781 19,394 17,967 18,025 18,049 17,584 1,484 3,558 2015 22,643 23,830 23,444 21,788 22,218 19,560 19,974 1,975 4,796 2016 30,710 29,261 27,674 25,430 23,063 23,076 1,891 9,849 2017 35,683 29,107 25,713 24,439 24,581 2,795 14,591 2018 40,122 34,478 34,321 31,909 3,922 12,524 2019 48,565 45,382 44,997 7,561 11,524 2020 55,960 55,531 11,949 11,983 2021 100,254 33,499 14,242 $ 356,625 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Years Ended December 31, Accident 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021 2012 6,100 11,854 14,292 15,902 16,683 17,426 17,951 18,164 18,329 18,363 2013 6,734 12,407 15,703 17,135 18,448 18,664 18,976 18,906 19,335 2014 5,958 11,672 14,393 16,011 16,177 16,535 16,607 16,707 2015 6,089 13,313 15,814 17,002 17,638 17,984 18,143 2016 7,260 15,329 17,904 18,728 19,856 20,551 2017 7,439 15,017 17,930 19,353 20,456 2018 8,978 19,811 24,023 26,201 2019 11,201 24,472 30,650 2020 12,141 30,646 2021 26,623 227,675 All outstanding liabilities before 2012, net of reinsurance 4,861 Liabilities for claims and claim adjustment expenses, net of reinsurance $ 133,811 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 27.6 % 32.6 % 14.8 % 8.6 % 4.5 % 3.6 % 2.2 % 1.5 % 1.8 % 0.5 % * Presented as unaudited required supplementary information Other Liability Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance As of December 31, 2021 Years Ended December 31, Total of IBNR Liabilities Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021 2012 1,442 880 973 863 1,092 1,278 1,745 1,721 1,717 1,796 $ 180 486 2013 1,914 1,876 1,617 1,580 1,804 2,068 1,651 1,667 1,703 340 369 2014 2,183 1,964 1,921 2,154 3,107 3,013 2,832 2,593 455 466 2015 2,946 2,652 2,862 3,549 3,334 2,860 2,523 696 511 2016 2,689 2,794 3,135 3,180 2,735 2,423 1,145 362 2017 4,964 3,089 4,555 3,966 3,267 1,609 343 2018 4,256 4,278 3,010 3,679 2,216 265 2019 5,457 2,849 3,608 3,110 128 2020 2,932 3,702 3,222 119 2021 4,362 3,238 137 $ 29,656 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Years Ended December 31, Accident 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021 2012 42 141 187 346 512 761 1,146 1,234 1,374 1,460 2013 65 195 281 573 798 1,048 1,153 1,215 1,282 2014 53 233 405 639 1,067 1,687 1,884 1,989 2015 123 374 600 945 1,187 1,258 1,523 2016 54 137 355 558 783 1,081 2017 52 439 676 999 1,387 2018 52 345 504 846 2019 111 170 239 2020 55 196 2021 719 10,722 All outstanding liabilities before 2012, net of reinsurance 225 Liabilities for claims and claim adjustment expenses, net of reinsurance $ 19,159 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 4.5 % 4.3 % 6.2 % 12.2 % 12.8 % 12.8 % 13.4 % 11.0 % 3.1 % 6.0 % * Presented as unaudited required supplementary information All Other Lines Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance As of December 31, 2021 Years Ended December 31, Total of IBNR Liabilities Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021 2012 18 3 25 14 4 2 3 2 1 1 $ — 479 2013 1 — 13 9 10 12 — — — — 572 2014 40 127 24 23 21 16 16 6 — 1,051 2015 168 132 108 113 98 98 19 — 1,167 2016 1,882 1,617 1,745 1,555 1,542 1,051 8 1,288 2017 2,852 2,917 2,417 2,442 1,935 2 2,128 2018 2,885 2,874 2,549 2,520 57 2,021 2019 3,756 3,367 3,219 169 1,434 2020 4,842 5,129 602 1,241 2021 23,365 4,412 3,911 $ 37,245 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Years Ended December 31, Accident 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021 2012 1 1 1 1 1 1 1 1 1 1 2013 — — — — — — — — — 2014 — 100 16 16 16 16 16 6 2015 63 98 98 99 98 98 19 2016 796 1,325 1,418 1,494 1,499 1,016 2017 1,412 2,099 2,203 2,321 1,884 2018 1,309 2,123 2,325 2,432 2019 1,903 2,532 2,789 2020 2,291 3,595 2021 11,093 22,835 All outstanding liabilities before 2012, net of reinsurance 71 Liabilities for claims and claim adjustment expenses, net of reinsurance $ 14,481 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 28.0 % 29.0 % 13.4 % 8.5 % 4.9 % 4.1 % 3.1 % 2.1 % 2.2 % 1.0 % * Presented as unaudited required supplementary information Total Lines Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance As of December 31, 2021 Years Ended December 31, Total of IBNR Liabilities Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021 2012 21,857 21,831 20,697 21,053 20,331 20,058 20,646 20,690 20,651 20,548 $ 989 4,154 2013 24,661 24,755 24,280 21,361 21,342 21,506 21,465 21,631 21,671 1,674 4,491 2014 24,580 22,777 21,726 21,571 21,095 21,054 20,897 20,183 1,939 5,075 2015 25,757 26,614 26,414 25,450 25,650 22,518 22,516 2,671 6,474 2016 35,281 33,672 32,554 30,165 27,340 26,550 3,044 11,499 2017 43,499 35,113 32,685 30,847 29,783 4,406 17,062 2018 47,263 41,630 39,880 38,108 6,195 14,810 2019 57,778 51,598 51,824 10,840 13,086 2020 63,734 64,362 15,773 13,343 2021 127,981 41,149 18,290 $ 423,526 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Years Ended December 31, Accident 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021 2012 6,143 11,996 14,480 16,249 17,196 18,188 19,098 19,399 19,704 19,824 2013 6,799 12,602 15,984 17,708 19,246 19,712 20,129 20,121 20,617 2014 6,011 12,005 14,814 16,666 17,260 18,238 18,507 18,702 2015 6,275 13,785 16,512 18,046 18,923 19,340 19,685 2016 8,110 16,791 19,677 20,780 22,138 22,648 2017 8,903 17,555 20,809 22,673 23,727 2018 10,339 22,279 26,852 29,479 2019 13,215 27,174 33,678 2020 14,487 34,437 2021 38,435 261,232 All outstanding liabilities before 2012, net of reinsurance 5,157 Liabilities for claims and claim adjustment expenses, net of reinsurance $ 167,451 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 28.0 % 29.0 % 13.4 % 8.5 % 4.9 % 4.1 % 3.1 % 2.1 % 2.2 % 1.0 % * Presented as unaudited required supplementary information |
Summary of Reconciliation of Claims Development to Liability | The reconciliation of the net incurred and paid claims development tables to the liability for unpaid loss and loss adjustment expense in the consolidated balance sheets is as follows: December 31, 2021 2020 Net outstanding liabilities Workers' compensation $ 133,811 $ 94,116 Other liability 19,159 16,622 All other lines of business 14,481 3,842 Liabilities for unpaid loss and loss adjustment expense, net of reinsurance 167,451 114,580 Reinsurance recoverable on unpaid claims Workers' compensation 260,891 259,220 Other liability 50,765 43,592 All other lines of business 57,352 32,843 Total reinsurance recoverable on unpaid claims 369,008 335,655 Unallocated loss adjustment expenses 7,861 7,582 Total liability for unpaid loss and loss adjustment expenses $ 544,320 $ 457,817 |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Reinsurance Disclosures [Abstract] | |
Summary of Reinsurance Recoverable | The Company holds collateral on a funds held basis or requires collateral in a trust or as a letter of credit to secure recoverable balances from reinsurers not authorized in the insurance carriers state of domicile as follows: December 31, 2021 2020 Letters of credit $ 24,979 $ 4,846 Trust 126,404 123,807 Funds held 156,401 143,528 Total $ 307,784 $ 272,181 The Company has unsecured aggregate recoverable for losses, paid and unpaid, loss adjustment expenses and unearned premiums with the following individual reinsurers, authorized or unauthorized, exceeding 5 percent of stockholders’ equity: December 31, 2021 2020 Arch Reins Co $ 22,050 $ 34,120 Markel Global Reins Co 66,933 77,222 |
Summary of Effects of Reinsurance | A summary of the impact of ceded reinsurance is as follows: Year Ended December 31, 2021 2020 Gross Assumed Ceded Net Gross Assumed Ceded Net Losses and LAE liabilities $ 531,598 $ 12,722 $ (369,008) $ 175,312 $ 445,867 $ 11,950 $ (335,655) $ 122,162 Unearned premiums 216,878 3,062 (129,411) 90,529 155,404 2,583 (107,971) 50,016 Written premiums 624,769 9,395 (394,888) 239,276 476,342 7,907 (352,252) 131,997 Earned premiums 563,337 8,916 (373,573) 198,680 424,136 7,898 (323,567) 108,467 Loss and loss adjustment expenses 343,134 14,287 (226,649) 130,772 211,096 2,579 (162,901) 50,774 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information | Supplemental balance sheet information, the weighted average remaining lease term and weighted average discount rate related to leases were as follows: December 31, December 31, (dollars in thousands) 2021 2020 Right of use asset $ 4,530 $ 6,338 Lease liability $ 4,976 $ 6,893 Weighted average remaining lease term 2.42 years 3.26 years Weighted average discount rate 6.33 % 6.37 % |
Schedule of Future Maturities of Lease Liabilities | Future maturities of lease liabilities as of December 31, 2021 are as follows: Operating Leases 2022 $ 2,428 2023 1,846 2024 971 2025 102 2026 7 Thereafter — Total lease payments 5,354 Less: imputed interest (378) Total lease liabilities $ 4,976 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the calculation of basic and diluted EPS of common stock: Year Ended December 31, (in thousands, except share and per share amounts) 2021 2020 2019 Net income - basic and diluted $ 19,330 $ 88,549 $ 28,126 Weighted average number of shares outstanding - basic 51,162,293 43,744,003 37,386,394 Effect of dilutive securities: Restricted stock units 11,157 741 — Dilutive shares 11,157 741 — Weighted average number of shares outstanding - diluted 51,173,450 43,744,744 37,386,394 Excluded: Antidilutive common stock equivalents 39,808 89,920 0 Earnings per share: Basic $ 0.38 $ 2.02 $ 0.75 Diluted $ 0.38 $ 2.02 $ 0.75 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income | The following table presents the changes in accumulated other comprehensive income for unrealized gains and losses on available-for-sale securities: Year Ended December 31, 2021 2020 2019 Balance at beginning of period $ 13,426 $ 6,500 $ (3,483) Other comprehensive income (loss), net of tax: Unrealized investment gains (losses): Unrealized investment gains (losses) arising during the period (11,386) 9,028 12,707 Income tax expense (benefit) (2,391) 1,903 2,671 Unrealized investment gains (losses), net of tax (8,995) 7,125 10,036 Less: reclassification adjustments to: Net realized investment gains included in net realized gains 59 252 67 Income tax expense 12 53 14 Total reclassifications included in net income, net of tax 47 199 53 Other comprehensive income (loss) (9,042) 6,926 9,983 Balance at end of period $ 4,384 $ 13,426 $ 6,500 |
Stock Compensation (Tables)
Stock Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | 2021 2020 Expected volatility 29.8% 29.8% Expected term 6 years 6 years Risk-free interest rate 1.32% 0.47% |
Summary of Stock Option Activity | A summary of the status of the Company's stock option activity as of December 31, 2021 and changes during the year then ended are as follows: Stock Options Weighted Average Exercise Price Balance outstanding, December 31, 2020 89,920 $ 15.00 Granted 60,729 $ 17.50 Forfeited or cancelled (30,462) $ 15.81 Balance outstanding, December 31, 2021 120,187 $ 16.06 Options exercisable, December 31, 2021 24,351 $ 15.00 |
Summary of Options, Vested and Expected to Vest, Outstanding | The following table summarizes information regarding stock options outstanding as of December 31, 2021: Options Outstanding Options Vested or Expected to Vest Stock Options Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term Aggregate Intrinsic Value Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term Aggregate Intrinsic Value 2020 Omnibus Plan 120,187 $ 16.06 8.70 years $ — 120,187 $ 16.06 8.70 years $ — |
Schedule of Share-based Payment Award, Restricted Stock Units, Valuation Assumptions | Grant date fair values were determined using a Monte Carlo valuation model based on the following assumptions: Fiscal 2021 Total grant date fair value $845 Total grant date fair value per share $13.92 Expected volatility 35.0% Weighted average expected life 2.77 years Risk-free interest rate 0.27% |
Summary of Share-based Payment Award, Total Shareholder Return | The percent of the target MSU that will be earned based on the Company’s TSR is as follows: Cumulative TSR % Percent of Units Vested Below 25.1% —% 25.1% 50% 47.2% 100% 69.3% and above 200% |
Summary of Nonvested Restricted Stock Unit Activity | A summary of the status of the Company’s non-vested restricted stock unit activity as of December 31, 2021 and changes during the year then ended is as follows: RSUs MSUs PSUs Total Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Non-vested outstanding, December 31, 2020 111,588 $ 14.99 — $ — — $ — 111,588 $ 14.99 Granted 74,669 $ 16.14 60,715 $ 13.92 121,458 $ 17.50 256,842 $ 16.26 Vested (34,686) $ 15.08 — $ — — $ — (34,686) $ 15.08 Forfeited or cancelled (34,462) $ 15.55 (9,854) $ 13.92 (19,710) $ 17.50 (64,026) $ 15.90 Non-vested outstanding, December 31, 2021 117,109 15.53 50,861 13.92 101,748 17.50 269,718 15.97 |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Regulated Operations [Abstract] | |
Summary of Statutory Basis Information | Summarized statutory basis information, which differs from GAAP, is shown below for Benchmark, ALIC, 7710 and BSIC. 2021 (in thousands, except percentages) Benchmark ALIC 7710 BSIC Statutory capital and surplus $ 170,686 $ 6,321 $ 6,395 $ 19,977 RBC authorized control level 24,279 567 382 129 Statutory net income (loss) (782) 128 76 (23) RBC percentage 703 % 1115 % 1674 % 15486 % 2020 (in thousands, except percentages) Benchmark ALIC 7710 Statutory capital and surplus $ 173,241 $ 6,284 $ 6,370 RBC authorized control level 14,379 523 1,265 Statutory net income 20,475 111 519 RBC percentage 1205 % 1202 % 504 % |
Schedule II. Condensed Financ_2
Schedule II. Condensed Financial Information of Registrant (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Balance Sheet | Trean Insurance Group, Inc. Condensed Balance Sheets (in thousands, except share data) December 31, 2021 2020 Assets Investment in subsidiaries $ 267,643 $ 252,607 Total investments 267,643 252,607 Cash and cash equivalents 4,242 683 Income taxes receivable 12,360 4,579 Intercompany receivables 135,369 152,643 Deferred tax asset 671 257 Other assets 1,930 — Total assets $ 422,215 $ 410,769 Liabilities Accounts payable and accrued expenses $ 306 $ 662 Total liabilities 306 662 Stockholders' equity Common stock, $0.01 par value per share (600,000,000 authorized; 51,176,887 and 51,148,782 issued and outstanding) 512 511 Additional paid-in capital 288,623 287,110 Retained earnings 128,390 109,060 Accumulated other comprehensive income 4,384 13,426 Total stockholders' equity 421,909 410,107 Total liabilities and stockholders' equity $ 422,215 $ 410,769 |
Condensed Statement of Operations | Trean Insurance Group, Inc. Condensed Statements of Operations (in thousands) Year Ended December 31, 2021 2020 Revenues Net investment income $ 9 $ — Other revenue — 300 Total revenue 9 300 Expenses General and administrative expenses 4,103 1,118 Other expenses 845 11,054 Noncash stock compensation 1,522 506 Interest expense — 299 Total expenses 6,470 12,977 Loss before taxes (6,461) (12,677) Income tax benefit (1,712) (1,993) Loss before equity earnings of subsidiaries (4,749) (10,684) Equity earnings of subsidiaries 24,079 99,233 Net income $ 19,330 $ 88,549 |
Condensed Statement of Cash Flows | Trean Insurance Group, Inc. Condensed Statements of Cash Flows (in thousands) Year Ended December 31, 2021 2020 Operating activities Net income $ 19,330 $ 88,549 Adjustments to reconcile net income to net cash from operating activities: Stock compensation 1,522 506 Equity (earnings) losses in subsidiaries (24,079) (99,233) Deferred income taxes (414) (257) Changes in operating assets and liabilities: Premiums and other receivables — 300 Other assets (1,930) (665) Accounts payable and accrued expenses (357) 662 Income taxes payable (7,781) (4,579) Intercompany receivables 17,277 (7,099) Net cash provided by (used in) operating activities 3,568 (21,816) Investing activities Capital contributions to subsidiaries — (71,489) Net cash used for investing activities — (71,489) Financing activities Shares redeemed for payroll taxes (94) (82) Proceeds from short swing rule 85 — Proceeds from initial public offering — 99,643 Deferred offering costs — (5,839) Cash contributed in formation of the Company — 266 Net cash provided by (used in) financing activities (9) 93,988 Net increase in cash, cash equivalents and restricted cash 3,559 683 Cash, cash equivalents and restricted cash ‑ beginning of period 683 — Cash, cash equivalents and restricted cash ‑ end of period $ 4,242 $ 683 |
Business and Basis of Present_3
Business and Basis of Presentation - Summary of Impact of ASC 606 Adoption (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Retained earnings | $ 128,390 | $ 109,060 | $ 38,682 | $ 11,259 |
Accumulated other comprehensive income | 4,384 | 13,426 | 6,500 | (3,483) |
Net investment income | 8,721 | 11,669 | 9,567 | |
Total revenue | 217,690 | 205,451 | 105,837 | |
Gains (losses) on embedded derivatives | 2,226 | (6,155) | (7,321) | |
Income before taxes | 92,451 | 30,802 | ||
Income tax expense | 5,449 | 6,235 | 6,234 | |
Net income | $ 19,330 | $ 88,549 | $ 28,126 | |
Basic (in dollars per share) | $ 0.38 | $ 2.02 | $ 0.75 | |
Diluted (in dollars per share) | $ 0.38 | $ 2.02 | $ 0.75 | |
Unrealized investment gains (losses) arising during the period | $ (11,386) | $ 9,028 | $ 12,707 | |
Income tax expense | (2,391) | 1,903 | 2,671 | |
Unrealized investment gains, net of tax | (8,995) | 7,125 | 10,036 | |
Other comprehensive income (loss) | $ (9,042) | 6,926 | 9,983 | |
Previously Reported | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Retained earnings | 112,959 | 40,361 | 9,779 | |
Accumulated other comprehensive income | 9,527 | 4,821 | (2,003) | |
Net investment income | 8,324 | 6,245 | ||
Total revenue | 202,106 | 102,515 | ||
Gains (losses) on embedded derivatives | 0 | 0 | ||
Income before taxes | 95,261 | 34,801 | ||
Income tax expense | 6,825 | 7,074 | ||
Net income | $ 90,769 | $ 31,285 | ||
Basic (in dollars per share) | $ 2.08 | $ 0.84 | ||
Diluted (in dollars per share) | $ 2.07 | $ 0.84 | ||
Unrealized investment gains (losses) arising during the period | $ 6,218 | $ 8,708 | ||
Income tax expense | 1,313 | 1,831 | ||
Unrealized investment gains, net of tax | 4,905 | 6,877 | ||
Other comprehensive income (loss) | 4,706 | 6,824 | ||
Revision of Prior Period, Adjustment | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Retained earnings | (3,899) | (1,679) | 1,480 | |
Accumulated other comprehensive income | 3,899 | 1,679 | $ (1,480) | |
Net investment income | 3,345 | 3,322 | ||
Total revenue | 3,345 | 3,322 | ||
Gains (losses) on embedded derivatives | (6,155) | (7,321) | ||
Income before taxes | (2,810) | (3,999) | ||
Income tax expense | (590) | (840) | ||
Net income | $ (2,220) | $ (3,159) | ||
Basic (in dollars per share) | $ (0.06) | $ (0.09) | ||
Diluted (in dollars per share) | $ (0.05) | $ (0.09) | ||
Unrealized investment gains (losses) arising during the period | $ 2,810 | $ 3,999 | ||
Income tax expense | 590 | 840 | ||
Unrealized investment gains, net of tax | 2,220 | 3,159 | ||
Other comprehensive income (loss) | $ 2,220 | $ 3,159 |
Business and Basis of Present_4
Business and Basis of Presentation - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Funds held under reinsurance agreements | $ 199,410 | $ 174,704 | |
Embedded derivatives, at fair value | 271 | 4,937 | |
Net investment income | $ 8,721 | $ 11,669 | $ 9,567 |
Effective income tax rate, percent | 22.00% | 6.70% | 20.20% |
Previously Reported | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Funds held under reinsurance agreements | $ 174,704 | ||
Net investment income | $ 8,324 | $ 6,245 | |
Effective income tax rate, percent | 7.20% | 20.30% | |
Income on funds held investments | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Net investment income | $ 2,338 | $ 3,345 | $ 3,322 |
Significant Accounting Polici_4
Significant Accounting Policies - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Accounting Policies [Abstract] | |||
Restricted cash | $ 407,000 | $ 4,085,000 | |
Other than temporary impairment losses, investments | 0 | 0 | $ 0 |
Receivables recovered | 177,000 | ||
Bad debt writeoff | 26,000 | 1,817,000 | |
Bad debt expense related to reinsurance | 0 | 0 | 0 |
Goodwill | 142,347,000 | 140,640,000 | 2,822,000 |
Goodwill impairment loss | 0 | 0 | 0 |
Impairment of intangible assets | $ 0 | $ 0 | $ 0 |
Number of operating segments | segment | 1 | ||
Number of reportable segments | segment | 1 |
Significant Accounting Polici_5
Significant Accounting Policies - Summary of Premiums and Other Receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total premiums and other receivables | $ 142,723 | $ 109,583 |
Less: Allowance for doubtful accounts | (803) | (366) |
Net premiums and other receivables | 141,920 | 109,217 |
Premiums receivable | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total premiums and other receivables | 133,200 | 106,708 |
Trade receivables | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total premiums and other receivables | 9,511 | 2,824 |
Notes receivable | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total premiums and other receivables | $ 12 | $ 51 |
Significant Accounting Polici_6
Significant Accounting Policies - Summary of Property, Plant and Equipment (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Impairments of property and equipment | $ 0 | $ 0 | $ 0 |
Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 3 years | ||
Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 30 years | ||
Building and building improvements | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 30 years | ||
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 7 years | ||
Office equipment | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years | ||
Software and computer equipment | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 3 years |
Significant Accounting Polici_7
Significant Accounting Policies - Schedules of Concentration of Risk, by Geography (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Concentration Risk [Line Items] | |||
Total gross written premium | $ 634,164 | $ 484,249 | $ 411,401 |
Geographic Concentration Risk | Revenue Benchmark | CALIFORNIA | |||
Concentration Risk [Line Items] | |||
Total gross written premium | 179,426 | 203,421 | 202,446 |
Geographic Concentration Risk | Revenue Benchmark | TEXAS | |||
Concentration Risk [Line Items] | |||
Total gross written premium | 85,154 | 28,909 | |
Geographic Concentration Risk | Revenue Benchmark | MICHIGAN | |||
Concentration Risk [Line Items] | |||
Total gross written premium | 46,271 | 41,830 | 38,174 |
Geographic Concentration Risk | Revenue Benchmark | FLORIDA | |||
Concentration Risk [Line Items] | |||
Total gross written premium | 27,982 | ||
Geographic Concentration Risk | Revenue Benchmark | ARIZONA | |||
Concentration Risk [Line Items] | |||
Total gross written premium | 26,272 | 27,950 | 34,215 |
Geographic Concentration Risk | Revenue Benchmark | GEORGIA | |||
Concentration Risk [Line Items] | |||
Total gross written premium | 25,619 | 12,869 | |
Geographic Concentration Risk | Revenue Benchmark | ALABAMA | |||
Concentration Risk [Line Items] | |||
Total gross written premium | 20,991 | 17,549 | 12,946 |
Geographic Concentration Risk | Revenue Benchmark | PENNSYLVANIA | |||
Concentration Risk [Line Items] | |||
Total gross written premium | 20,375 | 10,498 | |
Geographic Concentration Risk | Revenue Benchmark | TENNESSEE | |||
Concentration Risk [Line Items] | |||
Total gross written premium | 15,966 | 12,347 | 8,065 |
Geographic Concentration Risk | Revenue Benchmark | LOUISIANA | |||
Concentration Risk [Line Items] | |||
Total gross written premium | 14,124 | ||
Geographic Concentration Risk | Revenue Benchmark | Other Geographical Areas | |||
Concentration Risk [Line Items] | |||
Total gross written premium | $ 171,984 | $ 128,876 | $ 115,555 |
Product Concentration Risk | Revenue Benchmark | Public Utility Bonds | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 22.00% | 28.00% | |
Product Concentration Risk | Revenue Benchmark | Mortgage Backed Securities | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 29.00% | 27.00% |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 06, 2021 | Oct. 01, 2020 | Jul. 15, 2020 | Apr. 01, 2020 | Mar. 31, 2019 | Feb. 19, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 14, 2020 |
Business Acquisition [Line Items] | ||||||||||
Goodwill | $ 142,347 | $ 140,640 | $ 2,822 | |||||||
Intangible assets, net | 73,114 | 75,316 | ||||||||
Equity method investments | 0 | 232 | ||||||||
Gain on revaluation of Compstar investment | 0 | 69,846 | 0 | |||||||
Bargain purchase gain amount | $ 0 | $ 0 | $ 634 | |||||||
Western Integrated Care, LLC | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Percentage of voting interests acquired | 100.00% | |||||||||
Consideration transferred | $ 5,500 | |||||||||
Contingent consideration liability | 1,500 | |||||||||
Goodwill | 1,707 | |||||||||
Intangible assets, net | 3,624 | |||||||||
Intangible assets, net | $ 3,624 | |||||||||
7710 Insurance Company | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Percentage of voting interests acquired | 100.00% | |||||||||
Consideration transferred | $ 12,140 | |||||||||
Goodwill | 2,873 | |||||||||
Intangible assets, net | $ 3,299 | |||||||||
Compstar Holding Company LLC | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Percentage of voting interests acquired | 55.00% | |||||||||
Consideration transferred | $ 99,204 | |||||||||
Goodwill | 134,428 | |||||||||
Intangible assets, net | 73,954 | |||||||||
Ownership percentage | 45.00% | |||||||||
Fair value amount of equity method investment | 81,167 | |||||||||
Equity method investments | 11,321 | |||||||||
Gain on revaluation of Compstar investment | $ 69,846 | |||||||||
Compstar Holding Company LLC | Common Stock | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Stock issued during period (in shares) | 6,613,606 | 6,613,606 | ||||||||
Stock issued, price per share | $ 15 | |||||||||
LCTA Risk Services, Inc. | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Percentage of voting interests acquired | 100.00% | |||||||||
Consideration transferred | $ 1,400 | |||||||||
Goodwill | 517 | |||||||||
Intangible assets, net | $ 482 | |||||||||
American Liberty Insurance Company | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Percentage of voting interests acquired | 25.00% | |||||||||
Consideration transferred | $ 1,155 | |||||||||
First Choice Casualty Insurance Company | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Percentage of voting interests acquired | 100.00% | |||||||||
Consideration transferred | $ 5,314 | |||||||||
Bargain purchase gain amount | $ 634 |
Acquisitions - Schedule of Asse
Acquisitions - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Jul. 06, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | ||||
Goodwill | $ 142,347 | $ 140,640 | $ 2,822 | |
Western Integrated Care, LLC | ||||
Business Acquisition [Line Items] | ||||
Fair value of total consideration transferred | $ 5,500 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | ||||
Cash and cash equivalents | 205 | |||
Premiums and other receivables | 1,025 | |||
Property and equipment, net | 39 | |||
Right of use asset | 135 | |||
Goodwill | 1,707 | |||
Intangible assets, net | 3,624 | |||
Other assets | 16 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities [Abstract] | ||||
Accounts payable and accrued expenses | (873) | |||
Lease liability | (135) | |||
Debt | (243) | |||
Net assets acquired | $ 5,500 |
Acquisitions - Schedule of Acqu
Acquisitions - Schedule of Acquired Finite-Lived Intangible Assets by Major Class (Details) - USD ($) $ in Thousands | Jul. 06, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Jul. 15, 2020 |
Business Acquisition [Line Items] | ||||
Intangible assets, net | $ 73,114 | $ 75,316 | ||
Trade name | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, net | 3,298 | |||
Non-compete agreement | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, net | 230 | |||
Customer lists and relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, net | $ 69,586 | |||
Western Integrated Care, LLC | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, net | $ 3,624 | |||
Western Integrated Care, LLC | Trade name | ||||
Business Acquisition [Line Items] | ||||
Useful life | 2 years | |||
Intangible assets, net | $ 28 | |||
Western Integrated Care, LLC | Non-compete agreement | ||||
Business Acquisition [Line Items] | ||||
Useful life | 5 years | |||
Intangible assets, net | $ 256 | |||
Western Integrated Care, LLC | Customer lists and relationships | ||||
Business Acquisition [Line Items] | ||||
Useful life | 12 years | |||
Intangible assets, net | $ 3,340 | |||
Compstar Holding Company LLC | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, net | $ 73,954 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | $ 471,061 | $ 405,604 |
Equity securities: | 969 | 3,774 |
Total investments | 472,030 | 409,610 |
Embedded derivatives on funds held under reinsurance agreements | 271 | 4,937 |
Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt | 30,938 | 32,381 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 2,392 | 17,471 |
Equity securities: | 0 | 958 |
Embedded derivatives on funds held under reinsurance agreements | (4) | 176 |
Level 1 | Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 468,669 | 388,133 |
Equity securities: | 969 | 816 |
Embedded derivatives on funds held under reinsurance agreements | 275 | 4,761 |
Level 2 | Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt | 30,938 | 32,381 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 0 | 0 |
Equity securities: | 0 | 2,000 |
Embedded derivatives on funds held under reinsurance agreements | 0 | 0 |
Level 3 | Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt | 0 | 0 |
Available-For-Sale and Equity Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 472,030 | 409,378 |
Available-For-Sale and Equity Securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 2,392 | 18,429 |
Available-For-Sale and Equity Securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 469,638 | 388,949 |
Available-For-Sale and Equity Securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 2,000 |
U.S. government and government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 41,434 | 17,471 |
U.S. government and government securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 2,392 | 17,471 |
U.S. government and government securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 39,042 | 0 |
U.S. government and government securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 0 | 0 |
Foreign governments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 2,490 | 302 |
Foreign governments | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 0 | 0 |
Foreign governments | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 2,490 | 302 |
Foreign governments | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 0 | 0 |
States, territories and possessions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 10,766 | 7,774 |
States, territories and possessions | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 0 | 0 |
States, territories and possessions | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 10,766 | 7,774 |
States, territories and possessions | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 0 | 0 |
Political subdivisions of states territories and possessions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 40,002 | 33,212 |
Political subdivisions of states territories and possessions | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 0 | 0 |
Political subdivisions of states territories and possessions | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 40,002 | 33,212 |
Political subdivisions of states territories and possessions | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 0 | 0 |
Special revenue and special assessment obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 95,991 | 81,714 |
Special revenue and special assessment obligations | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 0 | 0 |
Special revenue and special assessment obligations | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 95,991 | 81,714 |
Special revenue and special assessment obligations | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 0 | 0 |
Industrial and public utilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 103,257 | 113,741 |
Industrial and public utilities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 0 | 0 |
Industrial and public utilities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 103,257 | 113,741 |
Industrial and public utilities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 0 | 0 |
Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 118,218 | 18,066 |
Commercial mortgage-backed securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 0 | 0 |
Commercial mortgage-backed securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 118,218 | 18,066 |
Commercial mortgage-backed securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 0 | 0 |
Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 17,368 | 93,017 |
Residential mortgage-backed securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 0 | 0 |
Residential mortgage-backed securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 17,368 | 93,017 |
Residential mortgage-backed securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 0 | 0 |
Other loan-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 41,425 | 39,945 |
Other loan-backed securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 0 | 0 |
Other loan-backed securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 41,425 | 39,945 |
Other loan-backed securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 0 | 0 |
Hybrid securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 110 | 362 |
Hybrid securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 0 | 0 |
Hybrid securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 110 | 362 |
Hybrid securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities: | 0 | 0 |
Preferred stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities: | 228 | 240 |
Preferred stock | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities: | 0 | 0 |
Preferred stock | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities: | 228 | 240 |
Preferred stock | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities: | 0 | 0 |
Common stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities: | 741 | 3,534 |
Common stock | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities: | 958 | |
Common stock | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities: | 741 | 576 |
Common stock | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities: | $ 0 | $ 2,000 |
Investments - Schedule of Debt
Investments - Schedule of Debt Securities, Available-for-sale (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Fixed maturities: | ||
Cost or Amortized Cost | $ 465,459 | $ 388,409 |
Gross Unrealized Gains | 8,719 | 17,454 |
Gross Unrealized Losses | (3,117) | (259) |
Fair Value | 471,061 | 405,604 |
Equity securities: | ||
Cost or Amortized Cost | 984 | 1,797 |
Gross Unrealized Gains | 0 | 2,053 |
Gross Unrealized Losses | (15) | (76) |
Fair Value | 969 | 3,774 |
Cost or Amortized Cost | 466,443 | 390,206 |
Gross Unrealized Gains | 8,719 | 19,507 |
Gross Unrealized Losses | (3,132) | (335) |
Fair Value | 472,030 | 409,378 |
U.S. government and government securities | ||
Fixed maturities: | ||
Cost or Amortized Cost | 41,490 | 17,135 |
Gross Unrealized Gains | 113 | 336 |
Gross Unrealized Losses | (169) | 0 |
Fair Value | 41,434 | 17,471 |
Foreign governments | ||
Fixed maturities: | ||
Cost or Amortized Cost | 2,500 | 300 |
Gross Unrealized Gains | 0 | 2 |
Gross Unrealized Losses | (10) | 0 |
Fair Value | 2,490 | 302 |
States, territories and possessions | ||
Fixed maturities: | ||
Cost or Amortized Cost | 10,593 | 7,500 |
Gross Unrealized Gains | 189 | 274 |
Gross Unrealized Losses | (16) | 0 |
Fair Value | 10,766 | 7,774 |
Political subdivisions of states territories and possessions | ||
Fixed maturities: | ||
Cost or Amortized Cost | 39,170 | 31,759 |
Gross Unrealized Gains | 975 | 1,453 |
Gross Unrealized Losses | (143) | 0 |
Fair Value | 40,002 | 33,212 |
Special revenue and special assessment obligations | ||
Fixed maturities: | ||
Cost or Amortized Cost | 93,664 | 77,329 |
Gross Unrealized Gains | 2,920 | 4,422 |
Gross Unrealized Losses | (593) | (37) |
Fair Value | 95,991 | 81,714 |
Industrial and public utilities | ||
Fixed maturities: | ||
Cost or Amortized Cost | 100,774 | 107,017 |
Gross Unrealized Gains | 2,835 | 6,768 |
Gross Unrealized Losses | (352) | (44) |
Fair Value | 103,257 | 113,741 |
Commercial mortgage-backed securities | ||
Fixed maturities: | ||
Cost or Amortized Cost | 119,378 | 16,242 |
Gross Unrealized Gains | 591 | 1,848 |
Gross Unrealized Losses | (1,751) | (24) |
Fair Value | 118,218 | 18,066 |
Residential mortgage-backed securities | ||
Fixed maturities: | ||
Cost or Amortized Cost | 16,549 | 91,478 |
Gross Unrealized Gains | 843 | 1,626 |
Gross Unrealized Losses | (24) | (87) |
Fair Value | 17,368 | 93,017 |
Other loan-backed securities | ||
Fixed maturities: | ||
Cost or Amortized Cost | 41,236 | 39,293 |
Gross Unrealized Gains | 248 | 719 |
Gross Unrealized Losses | (59) | (67) |
Fair Value | 41,425 | 39,945 |
Hybrid securities | ||
Fixed maturities: | ||
Cost or Amortized Cost | 105 | 356 |
Gross Unrealized Gains | 5 | 6 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 110 | 362 |
Preferred stock | ||
Equity securities: | ||
Cost or Amortized Cost | 243 | 243 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (15) | (3) |
Fair Value | 228 | 240 |
Common Stock | ||
Equity securities: | ||
Cost or Amortized Cost | 741 | 1,554 |
Gross Unrealized Gains | 0 | 2,053 |
Gross Unrealized Losses | 0 | (73) |
Fair Value | $ 741 | $ 3,534 |
Investments - Schedule of Conti
Investments - Schedule of Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Fair Value, less than 12 months | $ 200,252 | $ 21,644 |
Unrealized Loss, less than 12 months | (2,841) | (189) |
Fair Value, 12 months or more | 9,770 | 9,298 |
Unrealized Loss, 12 months or more | (276) | (70) |
Fair Value | 210,022 | 30,942 |
Unrealized Loss | (3,117) | (259) |
U.S. government and government securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Fair Value, less than 12 months | 26,935 | 4,518 |
Unrealized Loss, less than 12 months | (168) | 0 |
Fair Value, 12 months or more | 23 | 0 |
Unrealized Loss, 12 months or more | (1) | 0 |
Fair Value | 26,958 | 4,518 |
Unrealized Loss | (169) | 0 |
Foreign governments | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Fair Value, less than 12 months | 2,490 | 0 |
Unrealized Loss, less than 12 months | (10) | 0 |
Fair Value, 12 months or more | 0 | 0 |
Unrealized Loss, 12 months or more | 0 | 0 |
Fair Value | 2,490 | 0 |
Unrealized Loss | (10) | 0 |
States, territories and possessions | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Fair Value, less than 12 months | 935 | 0 |
Unrealized Loss, less than 12 months | (16) | 0 |
Fair Value, 12 months or more | 0 | 0 |
Unrealized Loss, 12 months or more | 0 | 0 |
Fair Value | 935 | 0 |
Unrealized Loss | (16) | 0 |
Political subdivisions of states territories and possessions | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Fair Value, less than 12 months | 11,115 | 0 |
Unrealized Loss, less than 12 months | (143) | 0 |
Fair Value, 12 months or more | 0 | 0 |
Unrealized Loss, 12 months or more | 0 | 0 |
Fair Value | 11,115 | 0 |
Unrealized Loss | (143) | 0 |
Special revenue and special assessment obligations | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Fair Value, less than 12 months | 29,917 | 2,923 |
Unrealized Loss, less than 12 months | (593) | (37) |
Fair Value, 12 months or more | 0 | 0 |
Unrealized Loss, 12 months or more | 0 | 0 |
Fair Value | 29,917 | 2,923 |
Unrealized Loss | (593) | (37) |
Industrial and public utilities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Fair Value, less than 12 months | 24,042 | 2,106 |
Unrealized Loss, less than 12 months | (286) | (44) |
Fair Value, 12 months or more | 1,058 | 0 |
Unrealized Loss, 12 months or more | (66) | 0 |
Fair Value | 25,100 | 2,106 |
Unrealized Loss | (352) | (44) |
Commercial mortgage-backed securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Fair Value, less than 12 months | 80,126 | 999 |
Unrealized Loss, less than 12 months | (1,565) | (24) |
Fair Value, 12 months or more | 6,212 | 0 |
Unrealized Loss, 12 months or more | (186) | 0 |
Fair Value | 86,338 | 999 |
Unrealized Loss | (1,751) | (24) |
Residential mortgage-backed securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Fair Value, less than 12 months | 4,539 | 8,811 |
Unrealized Loss, less than 12 months | (24) | (74) |
Fair Value, 12 months or more | 0 | 262 |
Unrealized Loss, 12 months or more | 0 | (13) |
Fair Value | 4,539 | 9,073 |
Unrealized Loss | (24) | (87) |
Other loan-backed securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Fair Value, less than 12 months | 20,153 | 2,037 |
Unrealized Loss, less than 12 months | (36) | (10) |
Fair Value, 12 months or more | 2,477 | 9,036 |
Unrealized Loss, 12 months or more | (23) | (57) |
Fair Value | 22,630 | 11,073 |
Unrealized Loss | (59) | (67) |
Hybrid securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Fair Value, less than 12 months | 0 | 250 |
Unrealized Loss, less than 12 months | 0 | 0 |
Fair Value, 12 months or more | 0 | 0 |
Unrealized Loss, 12 months or more | 0 | 0 |
Fair Value | 0 | 250 |
Unrealized Loss | $ 0 | $ 0 |
Investments - Summary of Invest
Investments - Summary of Investments by Contractual Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Cost or Amortized Cost | ||
Due in one year or less | $ 29,108 | |
Due after one year but before five years | 117,366 | |
Due after five years but before ten years | 78,967 | |
Due after ten years | 62,855 | |
Cost or Amortized Cost | 465,459 | $ 388,409 |
Fair Value | ||
Due in one year or less | 29,329 | |
Due after one year but before five years | 119,275 | |
Due after five years but before ten years | 81,217 | |
Due after ten years | 64,229 | |
Fair Value | 471,061 | 405,604 |
Commercial mortgage-backed securities | ||
Cost or Amortized Cost | ||
Cost or Amortized Cost | 119,378 | 16,242 |
Fair Value | ||
Fair Value | 118,218 | 18,066 |
Residential mortgage-backed securities | ||
Cost or Amortized Cost | ||
Cost or Amortized Cost | 16,549 | 91,478 |
Fair Value | ||
Fair Value | 17,368 | 93,017 |
Other loan-backed securities | ||
Cost or Amortized Cost | ||
Cost or Amortized Cost | 41,236 | 39,293 |
Fair Value | ||
Fair Value | $ 41,425 | $ 39,945 |
Investments - Summary of Realiz
Investments - Summary of Realized Gain (Loss) on Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Fixed maturities: | |||
Gains | $ 153 | $ 259 | $ 91 |
Losses | (94) | (7) | (24) |
Total fixed maturities | 59 | 252 | 67 |
Funds held investments: | |||
Gains | 112 | 0 | 0 |
Losses | (10) | 0 | 0 |
Total funds held investments | 102 | 0 | 0 |
Funds held investments: | |||
Gains | 0 | 3,115 | 0 |
Losses | (112) | 0 | 0 |
Total equity securities | (112) | 3,115 | 0 |
Total net investment realized gains (losses) | $ 49 | $ 3,367 | $ 67 |
Investments - Summary of Net In
Investments - Summary of Net Investment Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net Investment Income [Line Items] | |||
Net investment income | $ 8,721 | $ 11,669 | $ 9,567 |
Fixed maturities | |||
Net Investment Income [Line Items] | |||
Net investment income | 6,331 | 6,271 | 6,078 |
Income on funds held investments | |||
Net Investment Income [Line Items] | |||
Net investment income | 2,338 | 3,345 | 3,322 |
Preferred stock | |||
Net Investment Income [Line Items] | |||
Net investment income | 48 | 48 | 40 |
Common stock | |||
Net Investment Income [Line Items] | |||
Net investment income | 0 | 1,980 | 0 |
Interest earned on cash and short-term investments | |||
Net Investment Income [Line Items] | |||
Net investment income | $ 4 | $ 25 | $ 127 |
Investments- Schedule of Funds
Investments- Schedule of Funds Held Under Reinsurance Agreements (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Investments, Debt and Equity Securities [Abstract] | ||
Funds held under reinsurance agreements, at cost | $ 199,139 | $ 169,767 |
Embedded derivatives, at fair value | 271 | 4,937 |
Funds held under reinsurance agreements | $ 199,410 | $ 174,704 |
Investments- Embedded Derivativ
Investments- Embedded Derivatives, Gain (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net Investment Income [Line Items] | |||
Change in fair value of embedded derivatives | $ 4,666 | $ (2,810) | $ (3,999) |
Effect of realized gains on funds held investments | (102) | 0 | 0 |
Total gains (losses) on embedded derivatives | 2,226 | (6,155) | (7,321) |
Income on funds held investments | |||
Net Investment Income [Line Items] | |||
Effect of net investment income on funds held investments | $ (2,338) | $ (3,345) | $ (3,322) |
Equity Method Investments (Deta
Equity Method Investments (Details) - USD ($) $ in Thousands | Jan. 03, 2020 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 15, 2020 | Jul. 14, 2020 | Jan. 02, 2020 |
Schedule of Equity Method Investments [Line Items] | ||||||||
Carrying value of equity method investments | $ 0 | $ 232 | ||||||
Net income (loss) | 0 | 2,333 | $ 3,558 | |||||
Distributions from equity method investments | 0 | 2,953 | 5,489 | |||||
Proceeds from sale of equity method investment | 232 | 3,000 | 0 | |||||
Realized gain (loss) on sale | 0 | 0 | (34) | |||||
Unrealized gain on sale of equity method investment | $ 8,721 | 11,669 | 9,567 | |||||
Compstar Holding Company LLC | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Percentage of voting interests acquired | 55.00% | |||||||
Ownership percentage | 45.00% | |||||||
Carrying value of equity method investments | $ 11,321 | |||||||
Compstar Holding Company LLC | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Ownership percentage | 45.00% | |||||||
Carrying value of equity method investments | 11,831 | |||||||
Net income (loss) | 2,333 | 3,012 | ||||||
Distributions from equity method investments | 2,842 | 4,649 | ||||||
Trean Intermediaries | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Ownership percentage | 25.00% | |||||||
Net income (loss) | 552 | |||||||
Distributions from equity method investments | $ 225 | 840 | ||||||
Ownership percentage sold | 15.00% | |||||||
Proceeds from sale of equity method investment | $ 3,000 | $ 1,888 | ||||||
Cumulative percentage ownership after all transactions | 10.00% | |||||||
Realized gain (loss) on sale | 3,115 | $ (112) | ||||||
Unrealized gain on sale of equity method investment | $ 2,000 | |||||||
Stop-Loss | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Net income (loss) | (6) | |||||||
Realized gain (loss) on sale | $ (34) |
Equity Method Investments - Sum
Equity Method Investments - Summarized Financial Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | |||
Total assets | $ 1,503,015 | $ 1,369,783 | |
Total liabilities | 1,081,106 | 959,676 | |
Revenues | 217,690 | 205,451 | $ 105,837 |
Net income (loss) | $ 0 | $ 2,333 | 3,558 |
Equity Method Investment, Nonconsolidated Investee or Group of Investees | |||
Schedule of Equity Method Investments [Line Items] | |||
Total assets | 58,657 | ||
Total liabilities | 42,980 | ||
Revenues | 24,010 | ||
Net income (loss) | $ 8,870 |
Nonconsolidated Variable Inte_2
Nonconsolidated Variable Interest Entities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Trean Capital Trust I | |
Variable Interest Entity [Line Items] | |
Liquidation value | $ 7,500 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Total, at cost | $ 11,948 | $ 11,562 | |
Less: Accumulated depreciation | (4,316) | (3,308) | |
Property and equipment, net | 7,632 | 8,254 | |
Depreciation | 1,007 | 912 | $ 830 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Total, at cost | 1,780 | 1,780 | |
Building and building improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total, at cost | 5,755 | 5,755 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Total, at cost | 1,137 | 1,106 | |
Office equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total, at cost | 2,898 | 2,813 | |
Other property, plant and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total, at cost | 101 | 93 | |
Deposits on fixed assets not placed in service | |||
Property, Plant and Equipment [Line Items] | |||
Total, at cost | $ 277 | $ 15 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 140,640 | $ 2,822 |
Acquisitions | 1,707 | 137,818 |
Goodwill, ending balance | $ 142,347 | $ 140,640 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||
Totals | $ 81,634 | $ 78,010 | |
Less: Accumulated amortization | (8,520) | (2,694) | |
Total | 73,114 | 75,316 | |
Intangible asset amortization | 5,826 | 2,573 | $ 46 |
Non-compete agreement | |||
Finite-Lived Intangible Assets [Line Items] | |||
Totals | 300 | 44 | |
Total | $ 230 | ||
Non-compete agreement | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful life | 2 years | ||
Non-compete agreement | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful life | 5 years | ||
Trade name | |||
Finite-Lived Intangible Assets [Line Items] | |||
Totals | $ 3,710 | 3,682 | |
Total | $ 3,298 | ||
Trade name | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful life | 2 years | ||
Trade name | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful life | 15 years | ||
Customer lists and relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Totals | $ 77,624 | $ 74,284 | |
Total | $ 69,586 | ||
Customer lists and relationships | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful life | 10 years | ||
Customer lists and relationships | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful life | 14 years |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
2022 | $ 5,997 | |
2023 | 5,983 | |
2024 | 5,975 | |
2025 | 5,975 | |
2026 | 5,950 | |
Thereafter | 43,234 | |
Total | 73,114 | $ 75,316 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
2022 | 262 | |
2023 | 248 | |
2024 | 241 | |
2025 | 241 | |
2026 | 241 | |
Thereafter | 2,065 | |
Total | 3,298 | |
Customer lists and relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
2022 | 5,684 | |
2023 | 5,684 | |
2024 | 5,683 | |
2025 | 5,683 | |
2026 | 5,683 | |
Thereafter | 41,169 | |
Total | 69,586 | |
Non-compete agreement | ||
Finite-Lived Intangible Assets [Line Items] | ||
2022 | 51 | |
2023 | 51 | |
2024 | 51 | |
2025 | 51 | |
2026 | 26 | |
Thereafter | 0 | |
Total | $ 230 |
Deferred Policy Acquisition C_3
Deferred Policy Acquisition Costs, Net (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Insurance [Abstract] | |||
Premium deficiency | $ 0 | $ 0 | $ 0 |
Movement Analysis of Deferred Policy Acquisition Costs and Present Value of Future Profits [Roll Forward] | |||
Deferred policy acquisition cost, beginning balance | 1,332,000 | 2,115,000 | 2,976,000 |
Policy acquisition costs deferred | 22,853,000 | 7,593,000 | 14,646,000 |
Amortization charged to expense | (10,841,000) | (8,376,000) | (15,507,000) |
Deferred policy acquisition cost, ending balance | $ 13,344,000 | $ 1,332,000 | $ 2,115,000 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accrued commissions and third-party administration fees | $ 7,337 | $ 5,391 |
Trade payables | 4,765 | 2,823 |
Accrued taxes, licenses and fees | 6,710 | 4,527 |
Accrued wages and employee benefits | 4,873 | 4,092 |
Amounts retained for the accounts of others | 1,619 | 41,655 |
Litigation settlement | 0 | 1,210 |
Other liabilities | 4,144 | 1,542 |
Total | $ 29,448 | $ 61,240 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Total debt | $ 30,938 | |
Less: unamortized deferred financing costs | (576) | $ (744) |
Total debt | 30,362 | 31,637 |
Secured credit facility | ||
Debt Instrument [Line Items] | ||
Total debt | $ 30,938 | $ 32,381 |
Debt - Narrative (Details)
Debt - Narrative (Details) | Dec. 31, 2021USD ($)$ / shares | Jul. 06, 2021USD ($)loan | Dec. 31, 2020USD ($) | Oct. 07, 2020USD ($) | Jul. 16, 2020USD ($) | Dec. 31, 2019 | Jul. 07, 2011 | Jun. 21, 2006USD ($)shares | Dec. 31, 2021USD ($)$ / shares | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2021USD ($)$ / shares | Oct. 01, 2020USD ($) | Jul. 15, 2020USD ($) | Apr. 03, 2018USD ($) |
Debt Instrument [Line Items] | |||||||||||||||
Long-term debt, gross | $ 30,938,000 | $ 30,938,000 | $ 30,938,000 | ||||||||||||
Secured credit facility | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Long-term debt, gross | $ 30,938,000 | $ 32,381,000 | 30,938,000 | $ 32,381,000 | $ 30,938,000 | ||||||||||
Secured credit facility | Term Loan | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Maximum borrowing capacity | $ 27,500,000 | ||||||||||||||
Secured credit facility | Second Amended And Restated Credit Agreement | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Maximum borrowing capacity | $ 33,000,000 | ||||||||||||||
Extension term | 5 years | ||||||||||||||
Increase (decrease) to term loan debt amount | $ 11,707,000 | ||||||||||||||
Secured credit facility | Second Amended And Restated Credit Agreement | Minimum | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Quarterly installment payments | 206,000 | ||||||||||||||
Secured credit facility | Second Amended And Restated Credit Agreement | Maximum | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Quarterly installment payments | $ 825,000 | ||||||||||||||
Secured credit facility | Second Amended And Restated Credit Agreement | London Interbank Offered Rate (LIBOR) | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Basis spread on variable rate | 4.64% | 4.72% | 6.33% | 4.50% | 4.50% | 3.00% | |||||||||
Junior subordinated debt | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt interest expense | $ 0 | $ 271,000 | $ 464,000 | ||||||||||||
Long-term debt, gross | $ 7,732,000 | ||||||||||||||
Proceeds from subordinated debt | $ 7,807,000 | ||||||||||||||
Effective percentage | 5.49% | 5.49% | |||||||||||||
Junior subordinated debt | London Interbank Offered Rate (LIBOR) | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Basis spread on variable rate | 1.99% | 3.50% | |||||||||||||
Oak Street Loan | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Long-term debt, gross | $ 19,740,000 | $ 19,740,000 | $ 19,740,000 | ||||||||||||
Federal Paycheck Protection Program Loan (PPP Loan) | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Number of loans acquired | loan | 2 | ||||||||||||||
Federal Paycheck Protection Program Loan (PPP Loan) | Compstar Holding Company LLC | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Long-term debt, gross | $ 325,000 | ||||||||||||||
Federal Paycheck Protection Program Loan (PPP Loan) | 7710 Insurance Company | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Long-term debt, gross | $ 269,000 | ||||||||||||||
Federal Paycheck Protection Program Loan (PPP Loan) | Western Integrated Care, LLC | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Long-term debt, gross | $ 243,000 | ||||||||||||||
Preferred Capital Securities | Junior subordinated debt | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Shares issued during period | shares | 7,500 | ||||||||||||||
Preferred capital securities interest rate | 9.167% | ||||||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 1,000 | $ 1,000 | $ 1,000 | ||||||||||||
Common Securities | Junior subordinated debt | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Shares issued during period | shares | 232 | ||||||||||||||
Debt | Secured credit facility | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Maximum borrowing capacity | $ 3,000,000 | ||||||||||||||
Debt interest expense | $ 1,517,000 | $ 1,518,000 | $ 1,617,000 | ||||||||||||
Debt | Secured credit facility | Second Amended And Restated Credit Agreement | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Maximum borrowing capacity | $ 2,000,000 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Debt (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Debt Disclosure [Abstract] | |
2022 | $ 1,650 |
2023 | 2,888 |
2024 | 3,300 |
2025 | 23,100 |
Total debt | $ 30,938 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |||
Revenues | $ 10,240 | $ 12,104 | $ 9,125 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Summary of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue from contracts with customers | $ 10,240 | $ 12,104 | $ 9,125 |
Brokerage | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue from contracts with customers | 7,036 | 8,994 | |
Managing general agent fees | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue from contracts with customers | 603 | 976 | |
Third-party administrator fees | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue from contracts with customers | 1,608 | 1,630 | |
Consulting fees | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue from contracts with customers | $ 993 | $ 504 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Schedule of Contract with Customer, Contract Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 3,353 | $ 3,405 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Current tax expense | $ 7,823 | $ 7,291 | $ 8,642 |
Deferred tax expense | (2,374) | (1,056) | (2,408) |
Total income tax expense | $ 5,449 | $ 6,235 | $ 6,234 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Income tax expense computed at statutory rate | $ 5,204 | $ 19,415 | $ 6,469 |
State taxes, net of federal benefit | 47 | 577 | 293 |
Tax-exempt municipal income, net of proration | (263) | (272) | (271) |
Nondeductible IPO & potential buyer expenses | 10 | 957 | 91 |
Fair market value adjustment on Compstar investment | 0 | (14,668) | 0 |
Other | 451 | 226 | (348) |
Total income tax expense | $ 5,449 | $ 6,235 | $ 6,234 |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Income tax expense computed at statutory rate, percent | 21.00% | 21.00% | 21.00% |
State taxes, net of federal benefit, percent | 0.20% | 0.60% | 1.00% |
Tax-exempt municipal income, net of proration, percent | (1.10%) | (0.30%) | (0.90%) |
Nondeductible IPO & potential buyer expenses, percent | 0.00% | 1.00% | 0.30% |
Fair market value adjustment on Compstar investment, percent | 0.00% | (15.90%) | 0.00% |
Other, percent | 1.90% | 0.30% | (1.20%) |
Effective income tax rate, percent | 22.00% | 6.70% | 20.20% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Income Tax Examination [Line Items] | ||
Operating loss carryforwards | $ 1,676 | |
Deferred tax assets | 41 | $ 118 |
Federal Income Tax | ||
Income Tax Examination [Line Items] | ||
Operating loss carryforwards | $ 3,272 | $ 3,272 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Unpaid losses and LAE | $ 4,574 | $ 3,180 |
Unearned premiums | 3,802 | 2,101 |
NOL carryforward | 41 | 118 |
Lease liability | 1,188 | 1,789 |
Accrued liabilities | 926 | 189 |
Stock compensation | 484 | 120 |
Other | 51 | 81 |
Total deferred tax assets | 11,066 | 7,578 |
Deferred tax liabilities: | ||
Deferred acquisition costs | (2,802) | (259) |
Loss reserve discounting TCJA transitional adjustment | (473) | (591) |
Unrealized gains and losses on investments | (1,131) | (2,556) |
Property and equipment | (191) | (389) |
Right-of-use asset | (1,082) | (1,667) |
Intangible assets | (12,715) | (13,271) |
Unrealized gain on TRI investment | 0 | (474) |
Prepaid expenses | (43) | (352) |
Section 481(a) adjustment | (56) | (224) |
Other | (93) | (124) |
Total deferred tax liabilities | (18,586) | (19,907) |
Net deferred tax assets (liabilities) | $ 7,520 | $ 12,329 |
Liability for Unpaid Losses a_3
Liability for Unpaid Losses and Loss Adjustment Expense - Schedule of Liability for Unpaid Losses and Loss Adjustment Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||||
Unpaid losses and LAE reserves at beginning of period | $ 457,817 | $ 406,716 | $ 340,415 | |
Less losses ceded through reinsurance | (335,655) | (304,005) | (257,421) | |
Net unpaid losses and LAE at beginning of period | 175,312 | 122,162 | 102,711 | $ 82,994 |
Acquisition of subsidiary, net of losses ceded through reinsurance | 0 | 7,050 | 6,366 | |
Incurred losses and LAE related to: | ||||
Current period | 136,191 | 65,587 | 54,933 | |
Prior period | (5,419) | (14,813) | (10,272) | |
Total incurred losses and LAE | 130,772 | 50,774 | 44,661 | |
Paid losses and LAE, net of reinsurance, related to: | ||||
Current period | 42,484 | 15,411 | 11,852 | |
Prior period | 35,138 | 22,962 | 19,458 | |
Total paid losses and LAE | 77,622 | 38,373 | 31,310 | |
Net unpaid losses and LAE at end of period | 175,312 | 122,162 | 102,711 | |
Plus losses ceded through reinsurance | 369,008 | 335,655 | 304,005 | |
Unpaid losses and LAE reserves at end of period | 544,320 | 457,817 | 406,716 | |
Incurred losses and LAE related to prior years | (5,419) | (14,813) | $ (10,272) | |
Unallocated loss adjustment expenses | 7,861 | 7,582 | ||
Total liability for unpaid loss and loss adjustment expenses | 1,661 | $ 1,717 | ||
Life and Annuity Insurance Product Line | ||||
Paid losses and LAE, net of reinsurance, related to: | ||||
Unallocated loss adjustment expenses | $ 2,553 |
Liability for Unpaid Losses a_4
Liability for Unpaid Losses and Loss Adjustment Expense - Summary of Loss Development (Details) | Dec. 31, 2021USD ($)claim | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) |
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 423,526,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 261,232,000 | |||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance | $ 167,451,000 | $ 114,580,000 | ||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
1 | 28.00% | |||||||||
2 | 29.00% | |||||||||
3 | 13.40% | |||||||||
4 | 8.50% | |||||||||
5 | 4.90% | |||||||||
6 | 4.10% | |||||||||
7 | 3.10% | |||||||||
8 | 2.10% | |||||||||
9 | 2.20% | |||||||||
10 | 1.00% | |||||||||
Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 356,625,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 227,675,000 | |||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance | $ 133,811,000 | 94,116,000 | ||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
1 | 27.60% | |||||||||
2 | 32.60% | |||||||||
3 | 14.80% | |||||||||
4 | 8.60% | |||||||||
5 | 4.50% | |||||||||
6 | 3.60% | |||||||||
7 | 2.20% | |||||||||
8 | 1.50% | |||||||||
9 | 1.80% | |||||||||
10 | 0.50% | |||||||||
Other liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 29,656,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 10,722,000 | |||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance | $ 19,159,000 | 16,622,000 | ||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
1 | 4.50% | |||||||||
2 | 4.30% | |||||||||
3 | 6.20% | |||||||||
4 | 12.20% | |||||||||
5 | 12.80% | |||||||||
6 | 12.80% | |||||||||
7 | 13.40% | |||||||||
8 | 11.00% | |||||||||
9 | 3.10% | |||||||||
10 | 6.00% | |||||||||
All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 37,245,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 22,835,000 | |||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance | $ 14,481,000 | 3,842,000 | ||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
1 | 28.00% | |||||||||
2 | 29.00% | |||||||||
3 | 13.40% | |||||||||
4 | 8.50% | |||||||||
5 | 4.90% | |||||||||
6 | 4.10% | |||||||||
7 | 3.10% | |||||||||
8 | 2.10% | |||||||||
9 | 2.20% | |||||||||
10 | 1.00% | |||||||||
2012 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 20,548,000 | 20,651,000 | $ 20,690,000 | $ 20,646,000 | $ 20,058,000 | $ 20,331,000 | $ 21,053,000 | $ 20,697,000 | $ 21,831,000 | $ 21,857,000 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 19,824,000 | 19,704,000 | 19,399,000 | 19,098,000 | 18,188,000 | 17,196,000 | 16,249,000 | 14,480,000 | 11,996,000 | 6,143,000 |
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 989 | |||||||||
Cumulative Number of Reported Claims | claim | 4,154 | |||||||||
2012 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 18,751,000 | 18,933,000 | 18,967,000 | 18,898,000 | 18,778,000 | 19,235,000 | 20,176,000 | 19,699,000 | 20,948,000 | 20,397,000 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 18,363,000 | 18,329,000 | 18,164,000 | 17,951,000 | 17,426,000 | 16,683,000 | 15,902,000 | 14,292,000 | 11,854,000 | 6,100,000 |
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 809 | |||||||||
Cumulative Number of Reported Claims | claim | 3,189 | |||||||||
2012 | Other liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 1,796,000 | 1,717,000 | 1,721,000 | 1,745,000 | 1,278,000 | 1,092,000 | 863,000 | 973,000 | 880,000 | 1,442,000 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 1,460,000 | 1,374,000 | 1,234,000 | 1,146,000 | 761,000 | 512,000 | 346,000 | 187,000 | 141,000 | 42,000 |
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 180 | |||||||||
Cumulative Number of Reported Claims | claim | 486 | |||||||||
2012 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 1,000 | 1,000 | 2,000 | 3,000 | 2,000 | 4,000 | 14,000 | 25,000 | 3,000 | 18,000 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | $ 1,000 |
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 479 | |||||||||
2013 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 21,671,000 | 21,631,000 | 21,465,000 | 21,506,000 | 21,342,000 | 21,361,000 | 24,280,000 | 24,755,000 | 24,661,000 | |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 20,617,000 | 20,121,000 | 20,129,000 | 19,712,000 | 19,246,000 | 17,708,000 | 15,984,000 | 12,602,000 | 6,799,000 | |
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 1,674 | |||||||||
Cumulative Number of Reported Claims | claim | 4,491 | |||||||||
2013 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 19,968,000 | 19,964,000 | 19,814,000 | 19,426,000 | 19,528,000 | 19,772,000 | 22,650,000 | 22,879,000 | 22,746,000 | |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 19,335,000 | 18,906,000 | 18,976,000 | 18,664,000 | 18,448,000 | 17,135,000 | 15,703,000 | 12,407,000 | 6,734,000 | |
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 1,334 | |||||||||
Cumulative Number of Reported Claims | claim | 3,550 | |||||||||
2013 | Other liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 1,703,000 | 1,667,000 | 1,651,000 | 2,068,000 | 1,804,000 | 1,580,000 | 1,617,000 | 1,876,000 | 1,914,000 | |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 1,282,000 | 1,215,000 | 1,153,000 | 1,048,000 | 798,000 | 573,000 | 281,000 | 195,000 | 65,000 | |
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 340 | |||||||||
Cumulative Number of Reported Claims | claim | 369 | |||||||||
2013 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 0 | 0 | 0 | 12,000 | 10,000 | 9,000 | 13,000 | 0 | 1,000 | |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | $ 0 | |
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 572 | |||||||||
2014 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 20,183,000 | 20,897,000 | 21,054,000 | 21,095,000 | 21,571,000 | 21,726,000 | 22,777,000 | 24,580,000 | ||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 18,702,000 | 18,507,000 | 18,238,000 | 17,260,000 | 16,666,000 | 14,814,000 | 12,005,000 | 6,011,000 | ||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 1,939 | |||||||||
Cumulative Number of Reported Claims | claim | 5,075 | |||||||||
2014 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 17,584,000 | 18,049,000 | 18,025,000 | 17,967,000 | 19,394,000 | 19,781,000 | 20,686,000 | 22,357,000 | ||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 16,707,000 | 16,607,000 | 16,535,000 | 16,177,000 | 16,011,000 | 14,393,000 | 11,672,000 | 5,958,000 | ||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 1,484 | |||||||||
Cumulative Number of Reported Claims | claim | 3,558 | |||||||||
2014 | Other liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 2,593,000 | 2,832,000 | 3,013,000 | 3,107,000 | 2,154,000 | 1,921,000 | 1,964,000 | 2,183,000 | ||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 1,989,000 | 1,884,000 | 1,687,000 | 1,067,000 | 639,000 | 405,000 | 233,000 | 53,000 | ||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 455 | |||||||||
Cumulative Number of Reported Claims | claim | 466 | |||||||||
2014 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 6,000 | 16,000 | 16,000 | 21,000 | 23,000 | 24,000 | 127,000 | 40,000 | ||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 6,000 | 16,000 | 16,000 | 16,000 | 16,000 | 16,000 | 100,000 | $ 0 | ||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 1,051 | |||||||||
2015 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 22,516,000 | 22,518,000 | 25,650,000 | 25,450,000 | 26,414,000 | 26,614,000 | 25,757,000 | |||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 19,685,000 | 19,340,000 | 18,923,000 | 18,046,000 | 16,512,000 | 13,785,000 | 6,275,000 | |||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 2,671 | |||||||||
Cumulative Number of Reported Claims | claim | 6,474 | |||||||||
2015 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 19,974,000 | 19,560,000 | 22,218,000 | 21,788,000 | 23,444,000 | 23,830,000 | 22,643,000 | |||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 18,143,000 | 17,984,000 | 17,638,000 | 17,002,000 | 15,814,000 | 13,313,000 | 6,089,000 | |||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 1,975 | |||||||||
Cumulative Number of Reported Claims | claim | 4,796 | |||||||||
2015 | Other liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 2,523,000 | 2,860,000 | 3,334,000 | 3,549,000 | 2,862,000 | 2,652,000 | 2,946,000 | |||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 1,523,000 | 1,258,000 | 1,187,000 | 945,000 | 600,000 | 374,000 | 123,000 | |||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 696 | |||||||||
Cumulative Number of Reported Claims | claim | 511 | |||||||||
2015 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 19,000 | 98,000 | 98,000 | 113,000 | 108,000 | 132,000 | 168,000 | |||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 19,000 | 98,000 | 98,000 | 99,000 | 98,000 | 98,000 | $ 63,000 | |||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 1,167 | |||||||||
2016 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 26,550,000 | 27,340,000 | 30,165,000 | 32,554,000 | 33,672,000 | 35,281,000 | ||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 22,648,000 | 22,138,000 | 20,780,000 | 19,677,000 | 16,791,000 | 8,110,000 | ||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 3,044 | |||||||||
Cumulative Number of Reported Claims | claim | 11,499 | |||||||||
2016 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 23,076,000 | 23,063,000 | 25,430,000 | 27,674,000 | 29,261,000 | 30,710,000 | ||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 20,551,000 | 19,856,000 | 18,728,000 | 17,904,000 | 15,329,000 | 7,260,000 | ||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 1,891 | |||||||||
Cumulative Number of Reported Claims | claim | 9,849 | |||||||||
2016 | Other liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 2,423,000 | 2,735,000 | 3,180,000 | 3,135,000 | 2,794,000 | 2,689,000 | ||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 1,081,000 | 783,000 | 558,000 | 355,000 | 137,000 | 54,000 | ||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 1,145 | |||||||||
Cumulative Number of Reported Claims | claim | 362 | |||||||||
2016 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 1,051,000 | 1,542,000 | 1,555,000 | 1,745,000 | 1,617,000 | 1,882,000 | ||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 1,016,000 | 1,499,000 | 1,494,000 | 1,418,000 | 1,325,000 | $ 796,000 | ||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 8 | |||||||||
Cumulative Number of Reported Claims | claim | 1,288 | |||||||||
2017 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 29,783,000 | 30,847,000 | 32,685,000 | 35,113,000 | 43,499,000 | |||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 23,727,000 | 22,673,000 | 20,809,000 | 17,555,000 | 8,903,000 | |||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 4,406 | |||||||||
Cumulative Number of Reported Claims | claim | 17,062 | |||||||||
2017 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 24,581,000 | 24,439,000 | 25,713,000 | 29,107,000 | 35,683,000 | |||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 20,456,000 | 19,353,000 | 17,930,000 | 15,017,000 | 7,439,000 | |||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 2,795 | |||||||||
Cumulative Number of Reported Claims | claim | 14,591 | |||||||||
2017 | Other liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 3,267,000 | 3,966,000 | 4,555,000 | 3,089,000 | 4,964,000 | |||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 1,387,000 | 999,000 | 676,000 | 439,000 | 52,000 | |||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 1,609 | |||||||||
Cumulative Number of Reported Claims | claim | 343 | |||||||||
2017 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 1,935,000 | 2,442,000 | 2,417,000 | 2,917,000 | 2,852,000 | |||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 1,884,000 | 2,321,000 | 2,203,000 | 2,099,000 | $ 1,412,000 | |||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 2 | |||||||||
Cumulative Number of Reported Claims | claim | 2,128 | |||||||||
2018 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 38,108,000 | 39,880,000 | 41,630,000 | 47,263,000 | ||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 29,479,000 | 26,852,000 | 22,279,000 | 10,339,000 | ||||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 6,195 | |||||||||
Cumulative Number of Reported Claims | claim | 14,810 | |||||||||
2018 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 31,909,000 | 34,321,000 | 34,478,000 | 40,122,000 | ||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 26,201,000 | 24,023,000 | 19,811,000 | 8,978,000 | ||||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 3,922 | |||||||||
Cumulative Number of Reported Claims | claim | 12,524 | |||||||||
2018 | Other liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 3,679,000 | 3,010,000 | 4,278,000 | 4,256,000 | ||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 846,000 | 504,000 | 345,000 | 52,000 | ||||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 2,216 | |||||||||
Cumulative Number of Reported Claims | claim | 265 | |||||||||
2018 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 2,520,000 | 2,549,000 | 2,874,000 | 2,885,000 | ||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 2,432,000 | 2,325,000 | 2,123,000 | $ 1,309,000 | ||||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 57 | |||||||||
Cumulative Number of Reported Claims | claim | 2,021 | |||||||||
2019 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 51,824,000 | 51,598,000 | 57,778,000 | |||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 33,678,000 | 27,174,000 | 13,215,000 | |||||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 10,840 | |||||||||
Cumulative Number of Reported Claims | claim | 13,086 | |||||||||
2019 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 44,997,000 | 45,382,000 | 48,565,000 | |||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 30,650,000 | 24,472,000 | 11,201,000 | |||||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 7,561 | |||||||||
Cumulative Number of Reported Claims | claim | 11,524 | |||||||||
2019 | Other liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 3,608,000 | 2,849,000 | 5,457,000 | |||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 239,000 | 170,000 | 111,000 | |||||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 3,110 | |||||||||
Cumulative Number of Reported Claims | claim | 128 | |||||||||
2019 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 3,219,000 | 3,367,000 | 3,756,000 | |||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 2,789,000 | 2,532,000 | $ 1,903,000 | |||||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 169 | |||||||||
Cumulative Number of Reported Claims | claim | 1,434 | |||||||||
2020 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 64,362,000 | 63,734,000 | ||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 34,437,000 | 14,487,000 | ||||||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 15,773 | |||||||||
Cumulative Number of Reported Claims | claim | 13,343 | |||||||||
2020 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 55,531,000 | 55,960,000 | ||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 30,646,000 | 12,141,000 | ||||||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 11,949 | |||||||||
Cumulative Number of Reported Claims | claim | 11,983 | |||||||||
2020 | Other liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 3,702,000 | 2,932,000 | ||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 196,000 | 55,000 | ||||||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 3,222 | |||||||||
Cumulative Number of Reported Claims | claim | 119 | |||||||||
2020 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 5,129,000 | 4,842,000 | ||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 3,595,000 | $ 2,291,000 | ||||||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 602 | |||||||||
Cumulative Number of Reported Claims | claim | 1,241 | |||||||||
2021 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 127,981,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 38,435,000 | |||||||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 41,149 | |||||||||
Cumulative Number of Reported Claims | claim | 18,290 | |||||||||
2021 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 100,254,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 26,623,000 | |||||||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 33,499 | |||||||||
Cumulative Number of Reported Claims | claim | 14,242 | |||||||||
2021 | Other liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 4,362,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 719,000 | |||||||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 3,238 | |||||||||
Cumulative Number of Reported Claims | claim | 137 | |||||||||
2021 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 23,365,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 11,093,000 | |||||||||
Total of IBNR Liabilities Plus Expected Development on Reported Claims | $ 4,412 | |||||||||
Cumulative Number of Reported Claims | claim | 3,911 | |||||||||
All outstanding liabilities before 2012, net of reinsurance | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 5,157,000 | |||||||||
All outstanding liabilities before 2012, net of reinsurance | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 4,861,000 | |||||||||
All outstanding liabilities before 2012, net of reinsurance | Other liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 225,000 | |||||||||
All outstanding liabilities before 2012, net of reinsurance | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 71,000 |
Liability for Unpaid Losses a_5
Liability for Unpaid Losses and Loss Adjustment Expense - Summary of Reconciliation of Claims Development to Liability (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Liabilities for unpaid loss and loss adjustment expense, net of reinsurance | $ 167,451 | $ 114,580 | ||
Total reinsurance recoverable on unpaid claims | 369,008 | 335,655 | $ 304,005 | $ 257,421 |
Unallocated loss adjustment expenses | 7,861 | 7,582 | ||
Total liability for unpaid loss and loss adjustment expenses | 544,320 | 457,817 | $ 406,716 | $ 340,415 |
Workers' Compensation | ||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Liabilities for unpaid loss and loss adjustment expense, net of reinsurance | 133,811 | 94,116 | ||
Total reinsurance recoverable on unpaid claims | 260,891 | 259,220 | ||
Other liability | ||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Liabilities for unpaid loss and loss adjustment expense, net of reinsurance | 19,159 | 16,622 | ||
Total reinsurance recoverable on unpaid claims | 50,765 | 43,592 | ||
All Other Lines | ||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Liabilities for unpaid loss and loss adjustment expense, net of reinsurance | 14,481 | 3,842 | ||
Total reinsurance recoverable on unpaid claims | $ 57,352 | $ 32,843 |
Reinsurance - Narrative (Detail
Reinsurance - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Effects of Reinsurance [Line Items] | |||
Bad debt expense related to reinsurance | $ 0 | $ 0 | $ 0 |
Reinsurance recoverable | $ 377,241,000 | 343,213,000 | |
Ceded Credit Risk, Unsecured | Reinsurance Recoverable Including Reinsurance Premium Paid | Reinsurer Concentration Risk | |||
Effects of Reinsurance [Line Items] | |||
Concentration risk, percentage (exceeding) | 5.00% | ||
Reinsurers Authorized in Respective Insurance Carrier's State of Domicile | |||
Effects of Reinsurance [Line Items] | |||
Reinsurance recoverable | $ 43,009,000 | $ 31,176,000 |
Reinsurance - Summary of Reinsu
Reinsurance - Summary of Reinsurance Recoverable (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Effects of Reinsurance [Line Items] | ||
Reinsurance recoverable | $ 377,241 | $ 343,213 |
Ceded Credit Risk, Secured | Reinsurance Recoverable for Paid and Unpaid Claims and Claims Adjustments | Reinsurers Not Authorized in Respective Insurance Carrier's State of Domicile | ||
Effects of Reinsurance [Line Items] | ||
Reinsurance recoverable | 307,784 | 272,181 |
Ceded Credit Risk, Secured | Reinsurance Recoverable for Paid and Unpaid Claims and Claims Adjustments | Reinsurers Not Authorized in Respective Insurance Carrier's State of Domicile | Letters of credit | ||
Effects of Reinsurance [Line Items] | ||
Reinsurance recoverable | 24,979 | 4,846 |
Ceded Credit Risk, Secured | Reinsurance Recoverable for Paid and Unpaid Claims and Claims Adjustments | Reinsurers Not Authorized in Respective Insurance Carrier's State of Domicile | Trust | ||
Effects of Reinsurance [Line Items] | ||
Reinsurance recoverable | 126,404 | 123,807 |
Ceded Credit Risk, Secured | Reinsurance Recoverable for Paid and Unpaid Claims and Claims Adjustments | Reinsurers Not Authorized in Respective Insurance Carrier's State of Domicile | Funds held | ||
Effects of Reinsurance [Line Items] | ||
Reinsurance recoverable | 156,401 | 143,528 |
Ceded Credit Risk, Unsecured | Reinsurance Recoverable Including Reinsurance Premium Paid | Arch Reins Co | ||
Effects of Reinsurance [Line Items] | ||
Reinsurance recoverable | 22,050 | 34,120 |
Ceded Credit Risk, Unsecured | Reinsurance Recoverable Including Reinsurance Premium Paid | Markel Global Reins Co | ||
Effects of Reinsurance [Line Items] | ||
Reinsurance recoverable | $ 66,933 | $ 77,222 |
Reinsurance - Summary of Effect
Reinsurance - Summary of Effects of Reinsurance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Losses and LAE liabilities | |||
Gross | $ 531,598 | $ 445,867 | |
Assumed | 12,722 | 11,950 | |
Ceded | (369,008) | (335,655) | |
Net unpaid losses and LAE at beginning of period | 175,312 | 122,162 | |
Unearned premiums | |||
Gross | 216,878 | 155,404 | |
Assumed | 3,062 | 2,583 | |
Ceded | (129,411) | (107,971) | |
Net | 90,529 | 50,016 | |
Written premiums | |||
Gross | 624,769 | 476,342 | |
Assumed | 9,395 | 7,907 | |
Ceded | (394,888) | (352,252) | |
Net | 239,276 | 131,997 | |
Earned premiums | |||
Gross | 563,337 | 424,136 | |
Assumed | 8,916 | 7,898 | |
Ceded | (373,573) | (323,567) | $ (311,325) |
Net earned premiums | 198,680 | 108,467 | 86,478 |
Loss and loss adjustment expenses | |||
Gross | 343,134 | 211,096 | |
Assumed | 14,287 | 2,579 | |
Ceded | (226,649) | (162,901) | |
Total incurred losses and LAE | $ 130,772 | $ 50,774 | $ 44,661 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Lessee, Lease, Description [Line Items] | |||
Renewal term | 5 years | ||
Lease expense | $ 2,459 | $ 2,501 | |
Variable lease expense | 25 | 362 | |
Sublease income | $ 100 | $ 84 | |
Rent expense | $ 1,575 | ||
Operating leases, sublease income | $ 90 | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Term of contract | 1 month | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Term of contract | 42 months |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Right of use asset | $ 4,530 | $ 6,338 |
Lease liability | $ 4,976 | $ 6,893 |
Weighted average remaining lease term | 2 years 5 months 1 day | 3 years 3 months 3 days |
Weighted average discount rate | 6.33% | 6.37% |
Leases - Schedule of Future Mat
Leases - Schedule of Future Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
2022 | $ 2,428 | |
2023 | 1,846 | |
2024 | 971 | |
2025 | 102 | |
2026 | 7 | |
Thereafter | 0 | |
Total lease payments | 5,354 | |
Less: imputed interest | (378) | |
Total lease liabilities | $ 4,976 | $ 6,893 |
Equity - Narrative (Details)
Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 22, 2020 | Jul. 20, 2020 | Jul. 15, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Class of Stock [Line Items] | |||||||
Proceeds from initial public offering | $ 93,139 | $ 0 | $ 99,643 | $ 0 | |||
Payments for underwriting discounts and commissions | 7,500 | ||||||
Payments of offering expenses | 6,503 | ||||||
Common stock, authorized (in shares) | 600,000,000 | 600,000,000 | |||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||||
Common stock, issued (in shares) | 51,176,887 | 51,148,782 | |||||
Common stock, outstanding (in shares) | 51,176,887 | 51,148,782 | |||||
Other Expense | Altaris Capital Partners | |||||||
Class of Stock [Line Items] | |||||||
Initial public offering bonuses, contract buyout fee, and executive severance | $ 11,054 | ||||||
Initial Public Offering | |||||||
Class of Stock [Line Items] | |||||||
Sale of stock, number of shares issued in transaction | 10,714,286 | ||||||
Sale of stock, price per share (in dollars per share) | $ 15 | ||||||
IPO - Shares Issued and Sold By Trean Corporation | |||||||
Class of Stock [Line Items] | |||||||
Sale of stock, number of shares issued in transaction | 7,142,857 | ||||||
Consideration received on IPO | $ 107,142 | ||||||
IPO - Shares Sold by Selling Stockholders | |||||||
Class of Stock [Line Items] | |||||||
Sale of stock, number of shares issued in transaction | 1,207,142 | 3,571,429 | |||||
Consideration received on IPO | $ 71,678 | ||||||
Compstar Holding Company LLC | |||||||
Class of Stock [Line Items] | |||||||
Consideration transferred | $ 99,204 | ||||||
Percentage of voting interests acquired | 55.00% | ||||||
Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Common stock, outstanding (in shares) | 51,176,887 | 51,148,782 | 0 | 0 | |||
Corporate recapitalization shares exchanged | 37,386,394 | ||||||
Common Stock | Compstar Holding Company LLC | |||||||
Class of Stock [Line Items] | |||||||
Stock issued during period (in shares) | 6,613,606 | 6,613,606 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Net income | $ 19,330 | $ 88,549 | $ 28,126 |
Weighted average number of shares outstanding - basic | |||
Weighted average number of shares outstanding - basic (in shares) | 51,162,293 | 43,744,003 | 37,386,394 |
Effect of dilutive securities: | |||
Dilutive securities (in shares) | 11,157 | 741 | 0 |
Weighted average number of shares outstanding - diluted | |||
Weighted average number of shares outstanding - diluted (in shares) | 51,173,450 | 43,744,744 | 37,386,394 |
Excluded: Antidilutive common stock equivalents (in shares) | 39,808 | 89,920 | 0 |
Earnings per share: | |||
Basic (in dollars per share) | $ 0.38 | $ 2.02 | $ 0.75 |
Diluted (in dollars per share) | $ 0.38 | $ 2.02 | $ 0.75 |
Restricted Stock Units (RSUs) | |||
Effect of dilutive securities: | |||
Dilutive securities (in shares) | 11,157 | 741 | 0 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Stockholders' equity beginning balance | $ 410,107 | ||
Less reclassification adjustments to: | |||
Other comprehensive income (loss) | (9,042) | $ 6,926 | $ 9,983 |
Stockholders' equity ending balance | 421,909 | 410,107 | |
Accumulated Other Comprehensive Income (Loss) | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Stockholders' equity beginning balance | 13,426 | 6,500 | (3,483) |
Less reclassification adjustments to: | |||
Other comprehensive income (loss) | (9,042) | 6,926 | 9,983 |
Stockholders' equity ending balance | 4,384 | 13,426 | 6,500 |
AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-sale, Parent | |||
Unrealized investment gains (losses): | |||
Unrealized investment gains (losses) arising during the period | (11,386) | 9,028 | 12,707 |
Income tax expense (benefit) | (2,391) | 1,903 | 2,671 |
Unrealized investment gains (losses), net of tax | (8,995) | 7,125 | 10,036 |
Less reclassification adjustments to: | |||
Net realized investment gains included in net realized gains | 59 | 252 | 67 |
Income tax expense | 12 | 53 | 14 |
Total reclassifications included in net income, net of tax | 47 | 199 | 53 |
Other comprehensive income (loss) | $ (9,042) | $ 6,926 | $ 9,983 |
Stock Compensation - Narrative
Stock Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation expense | $ 1,522 | $ 506 | $ 0 | |
Cost not yet recognized, weighted average period for recognition | 8 years 8 months 12 days | |||
2020 Omnibus Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares authorized | 5,058,085 | 5,058,085 | ||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation expense | $ 164 | $ 61 | ||
Weighted average grant-date fair value of options granted (in dollars per share) | $ 5.49 | $ 4.43 | ||
Unrecognized compensation cost related to stock options | $ 361 | $ 361 | ||
Cost not yet recognized, weighted average period for recognition | 1 year 1 month 6 days | |||
Stock Options | Share-based Payment Arrangement, Employee | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period (in years) | 3 years | |||
Contractual term from date of grant (in years) | 10 years | |||
Stock Options | Share-based Payment Arrangement, Employee | Share-based Payment Arrangement, Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Annual vesting percentage | 33.00% | |||
Stock Options | Share-based Payment Arrangement, Employee | Share-based Payment Arrangement, Tranche Three | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Annual vesting percentage | 33.00% | |||
Stock Options | Share-based Payment Arrangement, Employee | Share-based Payment Arrangement, Tranche Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Annual vesting percentage | 33.00% | |||
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation expense | $ 1,358 | $ 445 | ||
Vesting period (in years) | 3 years | |||
Cost not yet recognized, weighted average period for recognition | 2 years 1 month 6 days | |||
Non-vested non-option stock-based compensation expense | $ 3,202 | $ 3,202 | ||
Fair value of restricted stock units vested | $ 498 | $ 174 | ||
Restricted Stock Units (RSUs) | Share-based Payment Arrangement, Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Annual vesting percentage | 33.00% | |||
Restricted Stock Units (RSUs) | Share-based Payment Arrangement, Tranche Three | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Annual vesting percentage | 33.00% | |||
Restricted Stock Units (RSUs) | Share-based Payment Arrangement, Tranche Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Annual vesting percentage | 33.00% | |||
Performance Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period (in years) | 3 years | |||
Performance Stock Units | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Payout rate (percentage) | 0.00% | 0.00% | ||
Performance Stock Units | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Payout rate (percentage) | 200.00% | 200.00% | ||
Performance Stock Units | 25.1% | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Payout rate (percentage) | 50.00% | 50.00% | ||
Performance Stock Units | 69.3% and Above | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Payout rate (percentage) | 200.00% | 200.00% | ||
Market-Based Stock Units (MSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance period (in years) | 3 years | |||
Market-Based Stock Units (MSUs) | 25.1% | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Annual vesting percentage | 50.00% | |||
Market-Based Stock Units (MSUs) | 69.3% and Above | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Annual vesting percentage | 200.00% |
Stock Compensation - Schedule o
Stock Compensation - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Expected volatility | 29.80% | 29.80% |
Expected term | 6 years | 6 years |
Risk-free interest rate | 1.32% | 0.47% |
Stock Compensation - Summary of
Stock Compensation - Summary of Stock Option Activity (Details) | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Stock Options | |
Forfeited or cancelled (in shares) | shares | (30,462) |
Options outstanding, ending balance (in shares) | shares | 120,187 |
Weighted Average Exercise Price | |
Forfeited or cancelled, weighted average exercise price (in dollars per share) | $ / shares | $ 15.81 |
Options outstanding, weighted average exercise price, ending balance (in dollars per share) | $ / shares | $ 16.06 |
Stock Options | |
Stock Options | |
Options outstanding, beginning balance (in shares) | shares | 89,920 |
Granted (in shares) | shares | 60,729 |
Options outstanding, ending balance (in shares) | shares | 120,187 |
Options exercisable (in shares) | shares | 24,351 |
Weighted Average Exercise Price | |
Options outstanding, weighted average exercise price, beginning balance (in dollars per share) | $ / shares | $ 15 |
Grants in period, weighted average exercise price (in dollars per share) | $ / shares | 17.50 |
Options outstanding, weighted average exercise price, ending balance (in dollars per share) | $ / shares | 16.06 |
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares | $ 15 |
Stock Compensation - Summary _2
Stock Compensation - Summary of Options, Vested and Expected to Vest, Outstanding (Details) $ / shares in Units, $ in Thousands | Dec. 31, 2021USD ($)$ / sharesshares |
Options Outstanding | |
Number of Shares | shares | 120,187 |
Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 16.06 |
Weighted Average Remaining Contract Term | 8 years 8 months 12 days |
Aggregate Intrinsic Value | $ | $ 0 |
Options Vested or Expected to Vest | |
Number of Shares | shares | 120,187 |
Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 16.06 |
Weighted Average Remaining Contract Term | 8 years 8 months 12 days |
Aggregate Intrinsic Value | $ | $ 0 |
Stock Compensation - Schedule_2
Stock Compensation - Schedule of Share-based Payment Award, Restricted Stock Units, Valuation Assumptions (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 29.80% | 29.80% |
Weighted average expected life | 6 years | 6 years |
Risk-free interest rate | 1.32% | 0.47% |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total grant date fair value | $ 845 | |
Total grant date fair value per share (in dollars per share) | $ 13.92 | |
Expected volatility | 35.00% | |
Weighted average expected life | 2 years 9 months 7 days | |
Risk-free interest rate | 0.27% |
Stock Compensation - Summary _3
Stock Compensation - Summary of Share-based Payment Award, Total Shareholder Return (Details) - Market-Based Stock Units (MSUs) | 12 Months Ended |
Dec. 31, 2021 | |
Below 25.1% | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Cumulative TSR % | 25.10% |
Annual vesting percentage | 0.00% |
25.1% | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Cumulative TSR % | 25.10% |
Annual vesting percentage | 50.00% |
47.2% | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Cumulative TSR % | 47.20% |
Annual vesting percentage | 100.00% |
69.3% and Above | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Cumulative TSR % | 69.30% |
Annual vesting percentage | 200.00% |
Stock Compensation - Summary _4
Stock Compensation - Summary of Nonvested Restricted Stock Unit Activity (Details) | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Shares | |
Non-vested outstanding, beginning balance (in shares) | shares | 111,588 |
Granted (in shares) | shares | 256,842 |
Vested (in shares) | shares | (34,686) |
Forfeited or cancelled (in shares) | shares | (64,026) |
Non-vested outstanding, ending balance (in shares) | shares | 269,718 |
Weighted Average Grant Date Fair Value | |
Non-vested outstanding, weighted average grant date fair value, beginning balance (in dollars per share) | $ / shares | $ 14.99 |
Grants in period, weighted average exercise price (in dollars per share) | $ / shares | 16.26 |
Vested in period, weighted average exercise price (in dollars per share) | $ / shares | 15.08 |
Forfeited or cancelled in period, weighted average exercise price (in dollars per share) | $ / shares | 15.90 |
Non-vested outstanding, weighted average grant date fair value, ending balance (in dollars per share) | $ / shares | $ 15.97 |
Restricted Stock Units (RSUs) | |
Shares | |
Non-vested outstanding, beginning balance (in shares) | shares | 111,588 |
Granted (in shares) | shares | 74,669 |
Vested (in shares) | shares | (34,686) |
Forfeited or cancelled (in shares) | shares | (34,462) |
Non-vested outstanding, ending balance (in shares) | shares | 117,109 |
Weighted Average Grant Date Fair Value | |
Non-vested outstanding, weighted average grant date fair value, beginning balance (in dollars per share) | $ / shares | $ 14.99 |
Grants in period, weighted average exercise price (in dollars per share) | $ / shares | 16.14 |
Vested in period, weighted average exercise price (in dollars per share) | $ / shares | 15.08 |
Forfeited or cancelled in period, weighted average exercise price (in dollars per share) | $ / shares | 15.55 |
Non-vested outstanding, weighted average grant date fair value, ending balance (in dollars per share) | $ / shares | $ 15.53 |
Market-Based Stock Units (MSUs) | |
Shares | |
Non-vested outstanding, beginning balance (in shares) | shares | 0 |
Granted (in shares) | shares | 60,715 |
Vested (in shares) | shares | 0 |
Forfeited or cancelled (in shares) | shares | (9,854) |
Non-vested outstanding, ending balance (in shares) | shares | 50,861 |
Weighted Average Grant Date Fair Value | |
Non-vested outstanding, weighted average grant date fair value, beginning balance (in dollars per share) | $ / shares | $ 0 |
Grants in period, weighted average exercise price (in dollars per share) | $ / shares | 13.92 |
Vested in period, weighted average exercise price (in dollars per share) | $ / shares | 0 |
Forfeited or cancelled in period, weighted average exercise price (in dollars per share) | $ / shares | 13.92 |
Non-vested outstanding, weighted average grant date fair value, ending balance (in dollars per share) | $ / shares | $ 13.92 |
Performance Stock Units (PSUs) | |
Shares | |
Non-vested outstanding, beginning balance (in shares) | shares | 0 |
Granted (in shares) | shares | 121,458 |
Vested (in shares) | shares | 0 |
Forfeited or cancelled (in shares) | shares | (19,710) |
Non-vested outstanding, ending balance (in shares) | shares | 101,748 |
Weighted Average Grant Date Fair Value | |
Non-vested outstanding, weighted average grant date fair value, beginning balance (in dollars per share) | $ / shares | $ 0 |
Grants in period, weighted average exercise price (in dollars per share) | $ / shares | 17.50 |
Vested in period, weighted average exercise price (in dollars per share) | $ / shares | 0 |
Forfeited or cancelled in period, weighted average exercise price (in dollars per share) | $ / shares | 17.50 |
Non-vested outstanding, weighted average grant date fair value, ending balance (in dollars per share) | $ / shares | $ 17.50 |
Regulatory Matters - Summary of
Regulatory Matters - Summary of Statutory Basis Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Benchmark | ||
Statutory Accounting Practices [Line Items] | ||
Statutory capital and surplus | $ 170,686 | $ 173,241 |
RBC authorized control level | 24,279 | 14,379 |
Statutory net income (loss) | $ (782) | $ 20,475 |
RBC percentage | 703.00% | 1205.00% |
ALIC | ||
Statutory Accounting Practices [Line Items] | ||
Statutory capital and surplus | $ 6,321 | $ 6,284 |
RBC authorized control level | 567 | 523 |
Statutory net income (loss) | $ 128 | $ 111 |
RBC percentage | 1115.00% | 1202.00% |
7710 | ||
Statutory Accounting Practices [Line Items] | ||
Statutory capital and surplus | $ 6,395 | $ 6,370 |
RBC authorized control level | 382 | 1,265 |
Statutory net income (loss) | $ 76 | $ 519 |
RBC percentage | 1674.00% | 504.00% |
BSIC | ||
Statutory Accounting Practices [Line Items] | ||
Statutory capital and surplus | $ 19,977 | |
RBC authorized control level | 129 | |
Statutory net income (loss) | $ (23) | |
RBC percentage | 15486.00% |
Regulatory Matters - Narrative
Regulatory Matters - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Benchmark | ||
Statutory Accounting Practices [Line Items] | ||
Statutory capital and surplus | $ 170,686,000 | $ 173,241,000 |
Benchmark | KANSAS | ||
Statutory Accounting Practices [Line Items] | ||
Future dividend payments percentage | 10.00% | |
Statutory amount available for dividend payments without regulatory approval | $ 20,474,000 | 23,475,000 |
Statutory capital and surplus | 1,500,000 | |
ALIC | ||
Statutory Accounting Practices [Line Items] | ||
Statutory capital and surplus | $ 6,321,000 | 6,284,000 |
ALIC | UTAH | ||
Statutory Accounting Practices [Line Items] | ||
Future dividend payments percentage | 10.00% | |
Statutory amount available for dividend payments without regulatory approval | $ 11,000 | 266,000 |
Statutory capital and surplus | 300,000 | |
7710 | ||
Statutory Accounting Practices [Line Items] | ||
Statutory capital and surplus | $ 6,395,000 | 6,370,000 |
7710 | SOUTH CAROLINA | ||
Statutory Accounting Practices [Line Items] | ||
Future dividend payments percentage | 10.00% | |
Statutory amount available for dividend payments without regulatory approval | $ 519,000 | $ 118,000 |
Statutory capital and surplus | 1,200,000 | |
BSIC | ||
Statutory Accounting Practices [Line Items] | ||
Statutory capital and surplus | $ 19,977,000 | |
BSIC | ARKANSAS | ||
Statutory Accounting Practices [Line Items] | ||
Future dividend payments percentage | 10.00% | |
Statutory capital and surplus | $ 20,000,000 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Minimum annual contributions per employee, percent | 100.00% | ||
Maximum annual contributions per employee, percent | 15.00% | ||
Vesting percentage | 25.00% | ||
Contributions by employer | $ 1,373 | $ 942 | $ 721 |
First 5% of Compensation | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Maximum annual contributions per employee, percent | 5.00% | ||
Employer matching contribution, percent of match | 50.00% | ||
Safe-Harbor Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer matching contribution, percent of match | 3.00% |
Transactions with Related Par_2
Transactions with Related Parties (Details) $ in Thousands | Jul. 06, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Jul. 15, 2020individual | Jul. 14, 2020 | Jan. 02, 2020 |
Related Party Transaction [Line Items] | |||||||
Gross earned premiums | $ 572,253 | $ 432,034 | $ 397,803 | ||||
Western Integrated Care, LLC | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of voting interests acquired | 100.00% | ||||||
Consideration transferred | $ 5,500 | ||||||
Contingent consideration liability | $ 1,500 | ||||||
Altaris Capital Partners | Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Due to related parties | 83 | ||||||
Altaris Capital Partners | Affiliated Entity | Outstanding Common Stock Owned, 35% Or More | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of outstanding common stock owned | 35.00% | ||||||
Number of individuals that can be nominated | individual | 3 | ||||||
Altaris Capital Partners | Affiliated Entity | Outstanding Common Stock Owned, 20% Or More But Less Than 35% | |||||||
Related Party Transaction [Line Items] | |||||||
Number of individuals that can be nominated | individual | 2 | ||||||
Altaris Capital Partners | Affiliated Entity | Outstanding Common Stock Owned, 20% Or More But Less Than 35% | Minimum | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of outstanding common stock owned | 20.00% | ||||||
Altaris Capital Partners | Affiliated Entity | Outstanding Common Stock Owned, 20% Or More But Less Than 35% | Maximum | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of outstanding common stock owned | 35.00% | ||||||
Altaris Capital Partners | Affiliated Entity | Outstanding Common Stock Owned, 10% Or More But Less Than 20% | |||||||
Related Party Transaction [Line Items] | |||||||
Number of individuals that can be nominated | individual | 1 | ||||||
Altaris Capital Partners | Affiliated Entity | Outstanding Common Stock Owned, 10% Or More But Less Than 20% | Minimum | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of outstanding common stock owned | 10.00% | ||||||
Altaris Capital Partners | Affiliated Entity | Outstanding Common Stock Owned, 10% Or More But Less Than 20% | Maximum | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of outstanding common stock owned | 20.00% | ||||||
Altaris Capital Partners | Affiliated Entity | Management Fees | |||||||
Related Party Transaction [Line Items] | |||||||
Payment for management fee | 500 | 1,000 | |||||
Altaris Capital Partners | Affiliated Entity | Termination Fee | |||||||
Related Party Transaction [Line Items] | |||||||
Payment of termination fee | $ 7,639 | ||||||
Trean Intermediaries | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage | 25.00% | ||||||
Trean Intermediaries | Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Revenue from related parties | 200 | ||||||
Compstar Holding Company LLC | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage | 45.00% | ||||||
Compstar Holding Company LLC | Affiliated Entity | Program Manager Agreement | |||||||
Related Party Transaction [Line Items] | |||||||
Gross earned premiums | 90,199 | 176,083 | |||||
Gross commissions | $ 17,709 | $ 37,034 |
Schedule II. Condensed Financ_3
Schedule II. Condensed Financial Information of Registrant - Condensed Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||||
Total investments | $ 472,030 | $ 409,610 | ||
Cash and cash equivalents | 129,577 | 153,149 | $ 74,268 | |
Income taxes receivable | 460 | 1,322 | ||
Other assets | 8,658 | 6,878 | ||
Total assets | 1,503,015 | 1,369,783 | ||
Liabilities | ||||
Accounts payable and accrued expenses | 29,448 | 61,240 | ||
Total liabilities | 1,081,106 | 959,676 | ||
Stockholders' equity | ||||
Common stock, $0.01 par value per share (600,000,000 authorized; 51,176,887 and 51,148,782 issued and outstanding) | 512 | 511 | ||
Additional paid-in capital | 288,623 | 287,110 | ||
Retained earnings | 128,390 | 109,060 | 38,682 | $ 11,259 |
Accumulated other comprehensive income | 4,384 | 13,426 | $ 6,500 | $ (3,483) |
Total stockholders' equity | 421,909 | 410,107 | ||
Total liabilities and stockholders' equity | 1,503,015 | 1,369,783 | ||
Parent Company | ||||
Assets | ||||
Investment in subsidiaries | 267,643 | 252,607 | ||
Total investments | 267,643 | 252,607 | ||
Cash and cash equivalents | 4,242 | 683 | ||
Income taxes receivable | 12,360 | 4,579 | ||
Intercompany receivables | 135,369 | 152,643 | ||
Deferred tax asset, net | 671 | 257 | ||
Other assets | 1,930 | 0 | ||
Total assets | 422,215 | 410,769 | ||
Liabilities | ||||
Accounts payable and accrued expenses | 306 | 662 | ||
Total liabilities | 306 | 662 | ||
Stockholders' equity | ||||
Common stock, $0.01 par value per share (600,000,000 authorized; 51,176,887 and 51,148,782 issued and outstanding) | 512 | 511 | ||
Additional paid-in capital | 288,623 | 287,110 | ||
Retained earnings | 128,390 | 109,060 | ||
Accumulated other comprehensive income | 4,384 | 13,426 | ||
Total stockholders' equity | 421,909 | 410,107 | ||
Total liabilities and stockholders' equity | $ 422,215 | $ 410,769 |
Schedule II. Condensed Financ_4
Schedule II. Condensed Financial Information of Registrant - Condensed Balance Sheets Parenthetical (Details) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock, issued (in shares) | 51,176,887 | 51,148,782 |
Common stock, outstanding (in shares) | 51,176,887 | 51,148,782 |
Parent Company | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock, issued (in shares) | 51,176,887 | 51,148,782 |
Common stock, outstanding (in shares) | 51,176,887 | 51,148,782 |
Schedule II. Condensed Financ_5
Schedule II. Condensed Financial Information of Registrant - Condensed Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues | |||
Net investment income | $ 8,721 | $ 11,669 | $ 9,567 |
Other revenue | 10,240 | 12,104 | 9,125 |
Total revenue | 217,690 | 205,451 | 105,837 |
Expenses | |||
General and administrative expenses | 54,706 | 38,668 | 20,959 |
Noncash stock compensation | 1,522 | 506 | 0 |
Interest expense | 1,685 | 1,922 | 2,169 |
Total expenses | 195,356 | 107,870 | 67,835 |
Loss before taxes | 24,779 | 92,451 | 30,802 |
Income tax benefit | 5,449 | 6,235 | 6,234 |
Equity earnings of subsidiaries | 0 | 2,333 | 3,558 |
Net income | 19,330 | 88,549 | $ 28,126 |
Parent Company | |||
Revenues | |||
Net investment income | 9 | 0 | |
Other revenue | 0 | 300 | |
Total revenue | 9 | 300 | |
Expenses | |||
General and administrative expenses | 4,103 | 1,118 | |
Other expenses | 845 | 11,054 | |
Noncash stock compensation | 1,522 | 506 | |
Interest expense | 0 | 299 | |
Total expenses | 6,470 | 12,977 | |
Loss before taxes | (6,461) | (12,677) | |
Income tax benefit | (1,712) | (1,993) | |
Loss before equity earnings of subsidiaries | (4,749) | (10,684) | |
Equity earnings of subsidiaries | 24,079 | 99,233 | |
Net income | $ 19,330 | $ 88,549 |
Schedule II. Condensed Financ_6
Schedule II. Condensed Financial Information of Registrant - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | Jul. 20, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Operating activities | ||||
Net income | $ 19,330 | $ 88,549 | $ 28,126 | |
Adjustments to reconcile net income to net cash from operating activities: | ||||
Stock compensation | 1,522 | 506 | 0 | |
Equity (earnings) losses in subsidiaries | 0 | (2,333) | (3,558) | |
Deferred income taxes | (2,405) | (1,035) | (1,958) | |
Changes in operating assets and liabilities: | ||||
Premiums and other receivables | (31,921) | (18,499) | (4,777) | |
Other assets | (13,776) | 4,459 | 631 | |
Accounts payable and accrued expenses | (7,951) | (2,976) | (639) | |
Income taxes payable | 862 | (1,986) | (1,278) | |
Net cash provided by operating activities | 94,359 | 50,012 | 52,173 | |
Investing activities | ||||
Net cash used in investing activities | (120,156) | (20,246) | (23,943) | |
Financing activities | ||||
Shares redeemed for payroll taxes | 94 | 82 | 0 | |
Proceeds from short swing rule | 85 | 0 | 0 | |
Proceeds from initial public offering | $ 93,139 | 0 | 99,643 | 0 |
Deferred offering costs | 0 | (5,839) | 0 | |
Net cash provided by (used in) financing activities | (1,453) | 51,400 | (8,125) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | (27,250) | 81,166 | 20,105 | |
Cash, cash equivalents and restricted cash ‑ beginning of period | 157,234 | 76,068 | 55,963 | |
Cash, cash equivalents and restricted cash ‑ end of period | 129,984 | 157,234 | 76,068 | |
Parent Company | ||||
Operating activities | ||||
Net income | 19,330 | 88,549 | ||
Adjustments to reconcile net income to net cash from operating activities: | ||||
Stock compensation | 1,522 | 506 | ||
Equity (earnings) losses in subsidiaries | (24,079) | (99,233) | ||
Deferred income taxes | (414) | (257) | ||
Changes in operating assets and liabilities: | ||||
Premiums and other receivables | 0 | 300 | ||
Other assets | (1,930) | (665) | ||
Accounts payable and accrued expenses | (357) | 662 | ||
Income taxes payable | (7,781) | (4,579) | ||
Intercompany receivables | 17,277 | (7,099) | ||
Net cash provided by operating activities | 3,568 | (21,816) | ||
Investing activities | ||||
Capital contributions to subsidiaries | 0 | (71,489) | ||
Net cash used in investing activities | 0 | (71,489) | ||
Financing activities | ||||
Shares redeemed for payroll taxes | (94) | (82) | ||
Proceeds from short swing rule | 85 | 0 | ||
Proceeds from initial public offering | 0 | 99,643 | ||
Deferred offering costs | 0 | (5,839) | ||
Cash contributed in formation of the Company | 0 | 266 | ||
Net cash provided by (used in) financing activities | (9) | 93,988 | ||
Net increase (decrease) in cash, cash equivalents and restricted cash | 3,559 | 683 | ||
Cash, cash equivalents and restricted cash ‑ beginning of period | 683 | 0 | ||
Cash, cash equivalents and restricted cash ‑ end of period | $ 4,242 | $ 683 | $ 0 |