Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 21, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 0-24000 | |
Entry Registrant Name | ERIE INDEMNITY COMPANY | |
Entity Incorporation, State or Country Code | PA | |
Entity Tax Identification Number | 25-0466020 | |
Entity Address, Address Line One | 100 Erie Insurance Place, | |
Entity Address, City or Town | Erie, | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 16530 | |
City Area Code | 814 | |
Local Phone Number | 870-2000 | |
Title of 12(b) Security | Class A common stock, | |
Trading Symbol | ERIE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0000922621 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Class A common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 46,189,068 | |
Class B common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 2,542 |
STATEMENTS OF OPERATIONS (UNAUD
STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Operating revenue | ||||
Total operating revenue | $ 741,236 | $ 687,839 | $ 2,139,489 | $ 1,998,046 |
Operating expenses | ||||
Total operating expenses | 634,764 | 592,736 | 1,844,705 | 1,741,783 |
Operating income | 106,472 | 95,103 | 294,784 | 256,263 |
Investment income | ||||
Net investment income | 5,834 | 18,858 | 24,606 | 49,605 |
Net realized and unrealized investment (losses) gains | (6,230) | 1,610 | (23,833) | 5,183 |
Net impairment (losses) recoveries recognized in earnings | (175) | 130 | (429) | 216 |
Total investment (loss) income | (571) | 20,598 | 344 | 55,004 |
Interest expense | 115 | 1,034 | 2,009 | 3,082 |
Other income (expense) | 562 | (541) | 1,372 | (1,608) |
Income before income taxes | 106,348 | 114,126 | 294,491 | 306,577 |
Income tax expense | 22,035 | 23,903 | 61,412 | 63,759 |
Net income | $ 84,313 | $ 90,223 | $ 233,079 | $ 242,818 |
Class A common stock | ||||
Earnings per share - Basic and diluted: | ||||
Common stock - basic (in dollars per share) | $ 1.81 | $ 1.94 | $ 5 | $ 5.21 |
Common stock - diluted (in dollars per share) | $ 1.61 | $ 1.72 | $ 4.46 | $ 4.64 |
Weighted average shares outstanding – Basic | ||||
Common stock - basic (in shares) | 46,189,025 | 46,189,035 | 46,188,878 | 46,188,729 |
Weighted average shares outstanding – Diluted | ||||
Common stock - diluted (in shares) | 52,296,411 | 52,305,245 | 52,297,685 | 52,307,859 |
Dividends declared per share | ||||
Dividends declared (in dollars per share) | $ 1.11 | $ 1.035 | $ 3.33 | $ 3.105 |
Class B common stock | ||||
Earnings per share - Basic and diluted: | ||||
Common stock - basic (in dollars per share) | 272 | 291 | 751 | 782 |
Common stock - diluted (in dollars per share) | $ 272 | $ 291 | $ 751 | $ 782 |
Weighted average shares outstanding – Basic | ||||
Common stock - basic (in shares) | 2,542 | 2,542 | 2,542 | 2,542 |
Weighted average shares outstanding – Diluted | ||||
Common stock - diluted (in shares) | 2,542 | 2,542 | 2,542 | 2,542 |
Dividends declared per share | ||||
Dividends declared (in dollars per share) | $ 166.50 | $ 155.25 | $ 499.50 | $ 465.75 |
Management fee revenue - policy issuance and renewal services | ||||
Operating revenue | ||||
Total operating revenue | $ 551,666 | $ 504,891 | $ 1,584,213 | $ 1,462,880 |
Operating expenses | ||||
Total operating expenses | 466,111 | 430,326 | 1,352,050 | 1,268,650 |
Management fee revenue - administrative services | ||||
Operating revenue | ||||
Total operating revenue | 14,657 | 14,471 | 43,446 | 43,985 |
Administrative services reimbursement revenue | ||||
Operating revenue | ||||
Total operating revenue | 168,653 | 162,410 | 492,655 | 473,133 |
Operating expenses | ||||
Total operating expenses | 168,653 | 162,410 | 492,655 | 473,133 |
Service agreement revenue | ||||
Operating revenue | ||||
Total operating revenue | $ 6,260 | $ 6,067 | $ 19,175 | $ 18,048 |
STATEMENTS OF COMPREHENSIVE INC
STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 84,313 | $ 90,223 | $ 233,079 | $ 242,818 |
Other comprehensive (loss) income, net of tax | ||||
Change in unrealized holding losses on available-for-sale securities | (17,178) | (3,732) | (69,082) | (9,808) |
Amortization of prior service costs and net actuarial loss on pension and other postretirement plans | 1,731 | 3,463 | 5,198 | 10,389 |
Total other comprehensive (loss) income, net of tax | (15,447) | (269) | (63,884) | 581 |
Comprehensive income | $ 68,866 | $ 89,954 | $ 169,195 | $ 243,399 |
STATEMENTS OF FINANCIAL POSITIO
STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 97,664 | $ 183,702 |
Available-for-sale securities | 25,750 | 38,396 |
Receivables from Erie Insurance Exchange and affiliates, net | 544,353 | 479,123 |
Prepaid expenses and other current assets | 49,360 | 56,206 |
Accrued investment income | 7,352 | 6,303 |
Total current assets | 724,479 | 763,730 |
Available-for-sale securities, net | 848,937 | 907,689 |
Equity securities | 68,969 | 87,743 |
Fixed assets, net | 408,750 | 374,802 |
Agent loans, net | 60,673 | 58,683 |
Deferred income taxes, net | 20,859 | 145 |
Other assets | 45,085 | 49,265 |
Total assets | 2,177,752 | 2,242,057 |
Current liabilities: | ||
Commissions payable | 310,225 | 270,746 |
Agent bonuses | 77,609 | 120,437 |
Accounts payable and accrued liabilities | 149,020 | 138,317 |
Dividends payable | 51,693 | 51,693 |
Contract liability | 36,786 | 34,935 |
Deferred executive compensation | 8,859 | 12,637 |
Current portion of long-term borrowings | 0 | 2,098 |
Total current liabilities | 634,192 | 630,863 |
Defined benefit pension plans | 131,222 | 130,383 |
Long-term borrowings | 0 | 91,734 |
Contract liability | 18,024 | 17,686 |
Deferred executive compensation | 11,441 | 14,571 |
Other long-term liabilities | 26,294 | 14,342 |
Total liabilities | 821,173 | 899,579 |
Shareholders’ equity | ||
Additional paid-in-capital | 16,481 | 16,496 |
Accumulated other comprehensive loss | (89,172) | (25,288) |
Retained earnings | 2,573,190 | 2,495,190 |
Total contributed capital and retained earnings | 2,502,669 | 2,488,568 |
Treasury stock, at cost; 22,110,132 shares held | (1,168,482) | (1,167,828) |
Deferred compensation | 22,392 | 21,738 |
Total shareholders’ equity | 1,356,579 | 1,342,478 |
Total liabilities and shareholders’ equity | 2,177,752 | 2,242,057 |
Class A common stock | ||
Shareholders’ equity | ||
Common stock | 1,992 | 1,992 |
Class B common stock | ||
Shareholders’ equity | ||
Common stock | $ 178 | $ 178 |
STATEMENTS OF FINANCIAL POSIT_2
STATEMENTS OF FINANCIAL POSITION (Parenthetical) | Sep. 30, 2022 $ / shares shares | Dec. 31, 2021 $ / shares shares |
Treasury stock (in shares) | 22,110,132 | 22,110,132 |
Class A common stock | ||
Common stock, stated value per share (in dollars per share) | $ / shares | $ 0.0292 | $ 0.0292 |
Common stock, authorized (in shares) | 74,996,930 | 74,996,930 |
Common stock, issued (in shares) | 68,299,200 | 68,299,200 |
Common stock, outstanding (in shares) | 46,189,068 | 46,189,068 |
Class B common stock | ||
Common stock, stated value per share (in dollars per share) | $ / shares | $ 70 | $ 70 |
Common stock, authorized (in shares) | 3,070 | 3,070 |
Common stock, issued (in shares) | 2,542 | 2,542 |
Common stock, outstanding (in shares) | 2,542 | 2,542 |
Ratio for converting shares of Class B common stock into shares of Class A common stock | 2,400 | 2,400 |
STATEMENTS OF SHAREHOLDERS' EQU
STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Class A common stock | Class B common stock | Common stock Class A common stock | Common stock Class B common stock | Additional paid-in-capital | Accumulated other comprehensive loss | Retained earnings | Retained earnings Class A common stock | Retained earnings Class B common stock | Treasury stock | Deferred compensation | |
Beginning balance at Dec. 31, 2020 | $ 1,188,048 | $ 1,992 | $ 178 | $ 16,487 | $ (78,143) | $ 2,393,624 | $ (1,163,670) | $ 17,580 | |||||
Increase (decrease) in shareholders' equity | |||||||||||||
Net income | 73,566 | 73,566 | |||||||||||
Other comprehensive (loss) income | (5,289) | (5,289) | |||||||||||
Dividends declared: | $ (47,806) | $ (395) | $ (47,806) | $ (395) | |||||||||
Net purchase of treasury stock | [1] | 9 | 9 | 0 | |||||||||
Deferred compensation | 0 | (846) | 846 | ||||||||||
Rabbi trust distribution | [2] | 0 | 876 | (876) | |||||||||
Ending balance at Mar. 31, 2021 | 1,208,133 | 1,992 | 178 | 16,496 | (83,432) | 2,418,989 | (1,163,640) | 17,550 | |||||
Beginning balance at Dec. 31, 2020 | 1,188,048 | 1,992 | 178 | 16,487 | (78,143) | 2,393,624 | (1,163,670) | 17,580 | |||||
Increase (decrease) in shareholders' equity | |||||||||||||
Net income | 242,818 | ||||||||||||
Other comprehensive (loss) income | 581 | 581 | |||||||||||
Ending balance at Sep. 30, 2021 | 1,286,856 | 1,992 | 178 | 16,496 | (77,562) | 2,491,842 | (1,167,490) | 21,400 | |||||
Beginning balance at Mar. 31, 2021 | 1,208,133 | 1,992 | 178 | 16,496 | (83,432) | 2,418,989 | (1,163,640) | 17,550 | |||||
Increase (decrease) in shareholders' equity | |||||||||||||
Net income | 79,029 | 79,029 | |||||||||||
Other comprehensive (loss) income | 6,139 | 6,139 | |||||||||||
Dividends declared: | (47,805) | (394) | (47,805) | (394) | |||||||||
Net purchase of treasury stock | [1] | 0 | 0 | 0 | |||||||||
Deferred compensation | 0 | (3,668) | 3,668 | ||||||||||
Rabbi trust distribution | [2] | 0 | 97 | (97) | |||||||||
Ending balance at Jun. 30, 2021 | 1,245,102 | 1,992 | 178 | 16,496 | (77,293) | 2,449,819 | (1,167,211) | 21,121 | |||||
Increase (decrease) in shareholders' equity | |||||||||||||
Net income | 90,223 | 90,223 | |||||||||||
Other comprehensive (loss) income | (269) | (269) | |||||||||||
Dividends declared: | (47,805) | (395) | (47,805) | (395) | |||||||||
Net purchase of treasury stock | [1] | 0 | 0 | 0 | |||||||||
Deferred compensation | 0 | (279) | 279 | ||||||||||
Ending balance at Sep. 30, 2021 | 1,286,856 | 1,992 | 178 | 16,496 | (77,562) | 2,491,842 | (1,167,490) | 21,400 | |||||
Beginning balance at Dec. 31, 2021 | 1,342,478 | 1,992 | 178 | 16,496 | (25,288) | 2,495,190 | (1,167,828) | 21,738 | |||||
Increase (decrease) in shareholders' equity | |||||||||||||
Net income | 68,619 | 68,619 | |||||||||||
Other comprehensive (loss) income | (25,189) | (25,189) | |||||||||||
Dividends declared: | (51,270) | (423) | (51,270) | (423) | |||||||||
Net purchase of treasury stock | [3] | (15) | (15) | 0 | |||||||||
Deferred compensation | 0 | (802) | 802 | ||||||||||
Rabbi trust distribution | [4] | 0 | 298 | (298) | |||||||||
Ending balance at Mar. 31, 2022 | 1,334,200 | 1,992 | 178 | 16,481 | (50,477) | 2,512,116 | (1,168,332) | 22,242 | |||||
Beginning balance at Dec. 31, 2021 | 1,342,478 | 1,992 | 178 | 16,496 | (25,288) | 2,495,190 | (1,167,828) | 21,738 | |||||
Increase (decrease) in shareholders' equity | |||||||||||||
Net income | 233,079 | ||||||||||||
Other comprehensive (loss) income | (63,884) | (63,884) | |||||||||||
Ending balance at Sep. 30, 2022 | 1,356,579 | 1,992 | 178 | 16,481 | (89,172) | 2,573,190 | (1,168,482) | 22,392 | |||||
Beginning balance at Mar. 31, 2022 | 1,334,200 | 1,992 | 178 | 16,481 | (50,477) | 2,512,116 | (1,168,332) | 22,242 | |||||
Increase (decrease) in shareholders' equity | |||||||||||||
Net income | 80,147 | 80,147 | |||||||||||
Other comprehensive (loss) income | (23,248) | (23,248) | |||||||||||
Dividends declared: | (51,270) | (423) | (51,270) | (423) | |||||||||
Net purchase of treasury stock | [3] | 0 | 0 | 0 | |||||||||
Deferred compensation | 0 | (907) | 907 | ||||||||||
Rabbi trust distribution | [4] | 0 | 99 | (99) | |||||||||
Ending balance at Jun. 30, 2022 | 1,339,406 | 1,992 | 178 | 16,481 | (73,725) | 2,540,570 | (1,169,140) | 23,050 | |||||
Increase (decrease) in shareholders' equity | |||||||||||||
Net income | 84,313 | 84,313 | |||||||||||
Other comprehensive (loss) income | (15,447) | (15,447) | |||||||||||
Dividends declared: | $ (51,270) | $ (423) | $ (51,270) | $ (423) | |||||||||
Net purchase of treasury stock | [3] | 0 | 0 | 0 | |||||||||
Deferred compensation | 0 | (799) | 799 | ||||||||||
Rabbi trust distribution | [4] | 0 | 1,457 | (1,457) | |||||||||
Ending balance at Sep. 30, 2022 | $ 1,356,579 | $ 1,992 | $ 178 | $ 16,481 | $ (89,172) | $ 2,573,190 | $ (1,168,482) | $ 22,392 | |||||
[1]Net purchases of treasury stock in 2021 include the repurchase of our Class A common stock in the open market that were subsequently distributed to satisfy stock based compensation awards.[2]Distributions of our Class A shares were made to a retired director and an incentive compensation deferral plan participant in 2021.[3]Net purchases of treasury stock in 2022 include the repurchase of our Class A common stock in the open market that were subsequently distributed to satisfy stock based compensation awards[4]Distributions of our Class A shares were made from the rabbi trust to four incentive compensation deferral plan participants in 2022. |
STATEMENTS OF SHAREHOLDERS' E_2
STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Class A common stock | ||||||||
Dividends declared (in dollars per share) | $ 1.11 | $ 1.11 | $ 1.11 | $ 1.035 | $ 1.035 | $ 1.035 | $ 3.33 | $ 3.105 |
Class B common stock | ||||||||
Dividends declared (in dollars per share) | $ 166.50 | $ 166.50 | $ 166.50 | $ 155.25 | $ 155.25 | $ 155.25 | $ 499.50 | $ 465.75 |
STATEMENTS OF CASH FLOWS (UNAUD
STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities | ||
Management fee received | $ 1,574,694 | $ 1,496,372 |
Administrative services reimbursements received | 487,081 | 471,395 |
Service agreement fee received | 19,025 | 18,048 |
Net investment income received | 28,901 | 27,957 |
Commissions paid to agents | (771,664) | (726,411) |
Agents bonuses paid | (131,699) | (119,778) |
Salaries and wages paid | (164,726) | (160,784) |
Pension contribution and employee benefits paid | (57,222) | (24,592) |
General operating expenses paid | (187,152) | (180,028) |
Administrative services expenses paid | (497,007) | (471,523) |
Income taxes paid | (59,989) | (63,504) |
Interest paid | (2,134) | (3,114) |
Net cash provided by operating activities | 238,108 | 264,038 |
Purchase of investments: | ||
Available-for-sale securities | (375,466) | (267,067) |
Equity securities | (12,956) | (45,654) |
Other investments | (157) | (605) |
Proceeds from investments: | ||
Available-for-sale securities sales | 238,732 | 108,869 |
Available-for-sale securities maturities/calls | 111,419 | 142,614 |
Equity securities | 16,679 | 54,303 |
Other investments | 429 | 903 |
Purchase of fixed assets | (50,885) | (38,097) |
Proceeds from disposal of fixed assets | 265 | 0 |
Loans to agents | (9,570) | (5,648) |
Collections on agent loans | 6,513 | 7,224 |
Net cash used in investing activities | (74,997) | (43,158) |
Cash flows from financing activities | ||
Dividends paid to shareholders | (155,079) | (144,600) |
Proceeds from short-term borrowings | 55,000 | 0 |
Payments on short-term borrowings | (55,000) | 0 |
Payments on long-term borrowings | (94,070) | (1,524) |
Net cash used in financing activities | (249,149) | (146,124) |
Net (decrease) increase in cash and cash equivalents | (86,038) | 74,756 |
Cash and cash equivalents, beginning of period | 183,702 | 161,240 |
Cash and cash equivalents, end of period | 97,664 | 235,996 |
Supplemental disclosure of noncash transactions | ||
Liability incurred to purchase fixed assets | 26,386 | 13,102 |
Operating lease assets obtained in exchange for new operating lease liabilities | $ 3,176 | $ 2,379 |
Nature of Operations
Nature of Operations | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Nature of Operations Erie Indemnity Company ("Indemnity", "we", "us", "our") is a publicly held Pennsylvania business corporation that has since its incorporation in 1925 served as the attorney-in-fact for the subscribers (policyholders) at the Erie Insurance Exchange ("Exchange"). The Exchange, which also commenced business in 1925, is a Pennsylvania-domiciled reciprocal insurer that writes property and casualty insurance. Our primary function as attorney-in-fact is to perform policy issuance and renewal services on behalf of the subscribers at the Exchange. We also act as attorney-in-fact on behalf of the Exchange with respect to all claims handling and investment management services, as well as the service provider for all claims handling, life insurance, and investment management services for its insurance subsidiaries, collectively referred to as "administrative services". Acting as attorney-in-fact in these two capacities is done in accordance with a subscriber's agreement (a limited power of attorney) executed individually by each subscriber (policyholder), which appoints us as their common attorney-in-fact to transact certain business on their behalf. Pursuant to the subscriber's agreement for acting as attorney-in-fact in these two capacities, we earn a management fee calculated as a percentage of the direct and affiliated assumed premiums written by the Exchange. The policy issuance and renewal services we provide to the Exchange are related to the sales, underwriting and issuance of policies. The sales related services we provide include agent compensation and certain sales and advertising support services. Agent compensation includes scheduled commissions to agents based upon premiums written as well as additional commissions and bonuses to agents, which are earned by achieving targeted measures. The underwriting services we provide include underwriting and policy processing. The remaining services we provide include customer service and administrative support. We also provide information technology services that support all the functions listed above. Included in these expenses are allocations of costs for departments that support these policy issuance and renewal functions. By virtue of its legal structure as a reciprocal insurer, the Exchange does not have any employees or officers. Therefore, it enters into contractual relationships by and through an attorney-in-fact. Indemnity serves as the attorney-in-fact on behalf of the Exchange with respect to its administrative services. The Exchange's insurance subsidiaries also utilize Indemnity for these services in accordance with the service agreements between each of the subsidiaries and Indemnity. Claims handling services include costs incurred in the claims process, including the adjustment, investigation, defense, recording and payment functions. Life insurance management services include costs incurred in the management and processing of life insurance business. Investment management services are related to investment trading activity, accounting and all other functions attributable to the investment of funds. Included in these expenses are allocations of costs for departments that support these administrative functions. The subscriber's agreement and service agreements provide for reimbursement of amounts incurred for these services to Indemnity. Reimbursements are settled at cost. State insurance regulations require that intercompany service agreements and any material amendments be approved in advance by the state insurance department. Our results of operations are tied to the growth and financial condition of the Exchange. If any events occurred that impaired the Exchange’s ability to grow or sustain its financial condition, including but not limited to reduced financial strength ratings, disruption in the independent agency relationships, significant catastrophe losses, or products not meeting customer demands, the Exchange could find it more difficult to retain its existing business and attract new business. A decline in the business of the Exchange almost certainly would have as a consequence a decline in the total premiums paid and a correspondingly adverse effect on the amount of the management fees we receive. We also have an exposure to a concentration of credit risk related to the unsecured receivables due from the Exchange for its management fee and cost reimbursements. See Note 12, "Concentrations of Credit Risk". Coronavirus ("COVID-19") pandemic |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of presentation The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. For further information, refer to the financial statements and footnotes included in our Form 10-K for the year ended December 31, 2021 as filed with the Securities and Exchange Commission on February 24, 2022. Use of estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue The majority of our revenue is derived from the subscriber’s agreement between us and the subscribers (policyholders) at the Exchange. Pursuant to the subscriber’s agreement, we earn a management fee calculated as a percentage, not to exceed 25%, of all direct and affiliated assumed written premiums of the Exchange. We allocate a portion of our management fee revenue, currently 25% of the direct and affiliated assumed written premiums of the Exchange, between the two performance obligations we have under the subscriber’s agreement. The first performance obligation is to provide policy issuance and renewal services to the subscribers (policyholders) at the Exchange, and the second is to act as attorney-in-fact on behalf of the Exchange, as well as the service provider for its insurance subsidiaries, with respect to all administrative services. The transaction price, including management fee revenue and administrative services reimbursement revenue, includes variable consideration and is allocated based on the estimated standalone selling prices developed using industry information and other available information for similar services. A constraining estimate of variable consideration exists related to the potential for management fees to be returned if a policy were to be cancelled mid-term. Management fees are returned to the Exchange when policyholders cancel their insurance coverage mid-term and premiums are refunded to them. The constraining estimate is determined using the expected value method, based on both historical and current information. The estimated transaction price, as reduced by the constraint, reflects consideration expected for performance of our services. We update the transaction price and the related allocation at least annually based upon the most recent information available or more frequently if there have been significant changes in any components considered in the transaction price. The first performance obligation is to provide policy issuance and renewal services that result in executed insurance policies between the Exchange or one of its insurance subsidiaries and the subscriber (policyholder). The subscriber (policyholder) receives economic benefits when substantially all the policy issuance or renewal services are complete and an insurance policy is issued or renewed by the Exchange or one of its insurance subsidiaries. It is at the time of policy issuance or renewal that the allocated portion of revenue is recognized. The Exchange, by virtue of its legal structure as a reciprocal insurer, does not have any employees or officers. Therefore, it enters into contractual relationships by and through an attorney-in-fact. Indemnity serves as the attorney-in-fact on behalf of the Exchange with respect to its administrative services in accordance with the subscriber's agreement. The Exchange's insurance subsidiaries also utilize Indemnity for these services in accordance with the service agreements between each of the subsidiaries and Indemnity. Collectively, these services represent a second performance obligation under the subscriber’s agreement and the service agreements. The revenue allocated to this performance obligation is recognized over a four-year period representing the time over which these services are provided. The portion of revenue not yet earned is recorded as a contract liability in the Statements of Financial Position. During the three and nine months ending September 30, 2022, we recognized revenue of $7.4 million and $30.1 million, respectively, that was included in the contract liabilities balance as of December 31, 2021. During the three and nine months ended September 30, 2021, we recognized revenue of $7.8 million and $31.7 million, respectively, that was included in the contract liabilities balance as of December 31, 2020. The administrative services expenses we incur and the related reimbursements we receive are recorded gross in the Statements of Operations. Indemnity records a receivable from the Exchange for management fee revenue when the premium is written or assumed by the Exchange. Indemnity collects the management fee from the Exchange when the Exchange collects the premiums from the subscribers (policyholders). As the Exchange issues policies with annual terms only, cash collections generally occur within one year. The following table disaggregates revenue by our two performance obligations: Three months ended September 30, Nine months ended September 30, (in thousands) 2022 2021 2022 2021 Management fee revenue - policy issuance and renewal services $ 551,666 $ 504,891 $ 1,584,213 $ 1,462,880 Management fee revenue - administrative services 14,657 14,471 43,446 43,985 Administrative services reimbursement revenue 168,653 162,410 492,655 473,133 Total administrative services revenue $ 183,310 $ 176,881 $ 536,101 $ 517,118 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Class A and Class B basic earnings per share and Class B diluted earnings per share are calculated under the two-class method. The two-class method allocates earnings to each class of stock based upon its dividend rights. Class B shares are convertible into Class A shares at a conversion ratio of 2,400 to 1. See Note 10, "Capital Stock". Class A diluted earnings per share are calculated under the if-converted method, which reflects the conversion of Class B shares to Class A shares. Diluted earnings per share calculations include the dilutive effect of assumed issuance of stock-based awards under compensation plans that have the option to be paid in stock using the treasury stock method. A reconciliation of the numerators and denominators used in the basic and diluted per-share computations is presented as follows for each class of common stock: Three months ended September 30, 2022 2021 (dollars in thousands, except per share data) Allocated net income (numerator) Weighted shares (denominator) Per-share amount Allocated net income (numerator) Weighted shares (denominator) Per-share amount Class A – Basic EPS: Income available to Class A stockholders $ 83,623 46,189,025 $ 1.81 $ 89,484 46,189,035 $ 1.94 Dilutive effect of stock-based awards 0 6,586 — 0 15,410 — Assumed conversion of Class B shares 690 6,100,800 — 739 6,100,800 — Class A – Diluted EPS: Income available to Class A stockholders on Class A equivalent shares $ 84,313 52,296,411 $ 1.61 $ 90,223 52,305,245 $ 1.72 Class B – Basic and diluted EPS: Income available to Class B stockholders $ 690 2,542 $ 272 $ 739 2,542 $ 291 Nine months ended September 30, 2022 2021 (dollars in thousands, except per share data) Allocated net income (numerator) Weighted shares (denominator) Per-share amount Allocated net income (numerator) Weighted shares (denominator) Per-share amount Class A – Basic EPS: Income available to Class A stockholders $ 231,171 46,188,878 $ 5.00 $ 240,830 46,188,729 $ 5.21 Dilutive effect of stock-based awards 0 8,007 — 0 18,330 — Assumed conversion of Class B shares 1,908 6,100,800 — 1,988 6,100,800 — Class A – Diluted EPS: Income available to Class A stockholders on Class A equivalent shares $ 233,079 52,297,685 $ 4.46 $ 242,818 52,307,859 $ 4.64 Class B – Basic and diluted EPS: Income available to Class B stockholders $ 1,908 2,542 $ 751 $ 1,988 2,542 $ 782 |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Financial instruments carried at fair value Our available-for-sale and equity securities are recorded at fair value, which is the price that would be received to sell the asset in an orderly transaction between willing market participants as of the measurement date. Valuation techniques used to derive the fair value of our available-for-sale and equity securities are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources. Unobservable inputs reflect our own assumptions regarding fair market value for these securities. Financial instruments are categorized based upon the following characteristics or inputs to the valuation techniques: • Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. • Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. • Level 3 – Unobservable inputs for the asset or liability. Estimates of fair values for our investment portfolio are obtained primarily from a nationally recognized pricing service. Our Level 1 securities are valued using an exchange traded price provided by the pricing service. Pricing service valuations for Level 2 securities include multiple verifiable, observable inputs including benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data. Pricing service valuations for Level 3 securities are based upon proprietary models and are used when observable inputs are not available or in illiquid markets. Although virtually all of our prices are obtained from third party sources, we also perform internal pricing reviews, including evaluating the methodology and inputs used to ensure that we determine the proper classification level of the financial instrument and reviewing securities with price changes that vary significantly from current market conditions or independent price sources. Price variances are investigated and corroborated by market data and transaction volumes. We have reviewed the pricing methodologies of our pricing service as well as other observable inputs and believe that the prices adequately consider market activity in determining fair value. In limited circumstances we adjust the price received from the pricing service when, in our judgment, a better reflection of fair value is available based upon corroborating information and our knowledge and monitoring of market conditions such as a disparity in price of comparable securities and/or non-binding broker quotes. In other circumstances, certain securities are internally priced because prices are not provided by the pricing service. When a price from the pricing service is not available, values are determined by obtaining broker/dealer quotes and/or market comparables. When available, we obtain multiple quotes for the same security. The ultimate value for these securities is determined based upon our best estimate of fair value using corroborating market information. As of September 30, 2022, nearly all of our available-for-sale and equity securities were priced using a third party pricing service. The following tables present our fair value measurements on a recurring basis by asset class and level of input as of: September 30, 2022 (in thousands) Total Level 1 Level 2 Level 3 Available-for-sale securities: Corporate debt securities $ 547,193 $ 0 $ 539,918 $ 7,275 Collateralized debt obligations 100,671 0 100,671 0 Commercial mortgage-backed securities 63,217 0 57,850 5,367 Residential mortgage-backed securities 128,546 0 124,884 3,662 Other debt securities 22,855 0 22,855 0 U.S. Treasury 12,205 0 12,205 0 Total available-for-sale securities 874,687 0 858,383 16,304 Equity securities: Financial services sector 57,595 0 55,747 1,848 Utilities sector 6,072 0 6,072 0 Energy sector 3,513 0 3,513 0 Consumer sector 1,418 0 1,418 0 Communications sector 371 0 371 0 Total equity securities 68,969 0 67,121 1,848 Total $ 943,656 $ 0 $ 925,504 $ 18,152 December 31, 2021 (in thousands) Total Level 1 Level 2 Level 3 Available-for-sale securities: Corporate debt securities $ 573,165 $ 0 $ 567,909 $ 5,256 Collateralized debt obligations 115,462 0 115,462 0 Commercial mortgage-backed securities 89,324 0 73,596 15,728 Residential mortgage-backed securities 139,922 0 131,108 8,814 Other debt securities 23,920 0 23,920 0 U.S. Treasury 4,292 0 4,292 0 Total available-for-sale securities 946,085 0 916,287 29,798 Equity securities: Financial services sector 71,722 1,624 68,015 2,083 Utilities sector 6,259 0 6,259 0 Energy sector 6,448 10 6,438 0 Consumer sector 3,314 0 3,314 0 Total equity securities 87,743 1,634 84,026 2,083 Total $ 1,033,828 $ 1,634 $ 1,000,313 $ 31,881 We review the fair value hierarchy classifications each reporting period. Transfers between hierarchy levels may occur due to changes in available market observable inputs. Level 3 Assets – 2022 Quarterly Change: (in thousands) Beginning balance at June 30, 2022 Included in earnings (1) Included Purchases Sales Transfers into Level 3 (2) Transfers out of Level 3 (2) Ending balance at September 30, 2022 Available-for-sale securities: Corporate debt securities $ 6,109 $ (7) $ (28) $ 753 $ (495) $ 2,899 $ (1,956) $ 7,275 Commercial mortgage-backed securities 8,871 (188) (413) 0 (660) 1,174 (3,417) 5,367 Residential mortgage-backed securities 42,549 (667) (1,708) 0 (6,626) 674 (30,560) 3,662 Total available-for-sale securities 57,529 (862) (2,149) 753 (7,781) 4,747 (35,933) 16,304 Equity securities 1,866 (18) 0 0 0 0 0 1,848 Total Level 3 securities $ 59,395 $ (880) $ (2,149) $ 753 $ (7,781) $ 4,747 $ (35,933) $ 18,152 Level 3 Assets – 2022 Year-to-Date Change: (in thousands) Beginning balance at December 31, 2021 Included in earnings (1) Included Purchases Sales Transfers into Level 3 (2) Transfers out of Level 3 (2) Ending balance at September 30, 2022 Available-for-sale securities: Corporate debt securities $ 5,256 $ (2) $ (417) $ 5,687 $ (3,614) $ 8,673 $ (8,308) $ 7,275 Commercial mortgage-backed securities 15,728 (892) (1,071) 0 (3,825) 5,509 (10,082) 5,367 Residential mortgage-backed securities 8,814 (643) (2,042) 4,887 (9,472) 38,214 (36,096) 3,662 Total available-for-sale securities 29,798 (1,537) (3,530) 10,574 (16,911) 52,396 (54,486) 16,304 Equity securities 2,083 (235) 0 0 0 0 0 1,848 Total Level 3 securities $ 31,881 $ (1,772) $ (3,530) $ 10,574 $ (16,911) $ 52,396 $ (54,486) $ 18,152 Level 3 Assets – 2021 Quarterly Change: (in thousands) Beginning balance at June 30, 2021 Included in earnings (1) Included Purchases Sales Transfers into Level 3 (2) Transfers out of Level 3 (2) Ending balance at September 30, 2021 Available-for-sale securities: Corporate debt securities $ 6,078 $ 7 $ 3 $ 1,995 $ (1,213) $ 1,129 $ (1,802) $ 6,197 Collateralized debt obligations 750 0 0 0 0 0 (750) 0 Commercial mortgage-backed securities 17,133 (90) (143) 229 (2,912) 0 (4,523) 9,694 Residential mortgage-backed securities 3,041 (5) (26) 0 (366) 4,288 (2,644) 4,288 Other debt securities 2,544 0 1 0 (757) 0 (1,334) 454 Total available-for-sale securities 29,546 (88) (165) 2,224 (5,248) 5,417 (11,053) 20,633 Equity securities 1,000 13 0 0 0 1,093 0 2,106 Total Level 3 securities $ 30,546 $ (75) $ (165) $ 2,224 $ (5,248) $ 6,510 $ (11,053) $ 22,739 Level 3 Assets – 2021 Year-to-Date Change: (in thousands) Beginning balance at December 31, 2020 Included in earnings (1) Included Purchases Sales Transfers into Level 3 (2) Transfers out of Level 3 (2) Ending balance at September 30, 2021 Available-for-sale securities: Corporate debt securities $ 5,825 $ 27 $ 82 $ 4,253 $ (1,886) $ 3,678 $ (5,782) $ 6,197 Collateralized debt obligations 0 0 0 750 0 0 (750) 0 Commercial mortgage-backed securities 19,462 (287) (590) 3,073 (3,878) 3,854 (11,940) 9,694 Residential mortgage-backed securities 937 (11) (26) 0 (842) 7,318 (3,088) 4,288 Other debt securities 0 0 (1) 2,588 (799) 0 (1,334) 454 Total available-for-sale securities 26,224 (271) (535) 10,664 (7,405) 14,850 (22,894) 20,633 Equity securities 0 18 0 1,000 0 2,183 (1,095) 2,106 Total Level 3 securities $ 26,224 $ (253) $ (535) $ 11,664 $ (7,405) $ 17,033 $ (23,989) $ 22,739 (1) These amounts are reported as net investment income and net realized and unrealized investment (losses) gains for each of the periods presented above. (2) Transfers into and/or (out) of Level 3 are primarily attributable to the availability of market observable information and the re-evaluation of the observability of pricing inputs. Financial instruments not carried at fair value The following table presents the carrying values and fair values of financial instruments categorized as Level 3 in the fair value hierarchy that are recorded at carrying value as of: September 30, 2022 December 31, 2021 (in thousands) Carrying value Fair value Carrying value Fair value Agent loans (1) $ 69,425 $ 57,457 $ 66,368 $ 68,957 Long-term borrowings — — 94,070 103,981 (1) The discount rate used to calculate fair value at September 30, 2022 is reflective of an increase in the BB+ financial yield curve. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2022 | |
Investments [Abstract] | |
Investments | Investments Available-for-sale securities See Note 5, "Fair Value" for additional fair value disclosures. The following tables summarize the cost and estimated fair value, net of credit loss allowance, of our available-for-sale securities as of: September 30, 2022 (in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Corporate debt securities $ 591,682 $ 186 $ 44,675 $ 547,193 Collateralized debt obligations 105,938 6 5,273 100,671 Commercial mortgage-backed securities 71,032 0 7,815 63,217 Residential mortgage-backed securities 147,276 1 18,731 128,546 Other debt securities 25,103 0 2,248 22,855 U.S. Treasury 13,266 0 1,061 12,205 Total available-for-sale securities, net $ 954,297 $ 193 $ 79,803 $ 874,687 December 31, 2021 (in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Corporate debt securities $ 565,997 $ 9,663 $ 2,495 $ 573,165 Collateralized debt obligations 115,344 456 338 115,462 Commercial mortgage-backed securities 88,636 1,465 777 89,324 Residential mortgage-backed securities 140,217 1,007 1,302 139,922 Other debt securities 23,859 197 136 23,920 U.S. Treasury 4,226 73 7 4,292 Total available-for-sale securities, net $ 938,279 $ 12,861 $ 5,055 $ 946,085 The amortized cost and estimated fair value of available-for-sale securities at September 30, 2022 are shown below by remaining contractual term to maturity. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. September 30, 2022 Amortized Estimated (in thousands) cost fair value Due in one year or less $ 25,891 $ 25,558 Due after one year through five years 424,086 396,166 Due after five years through ten years 217,387 200,110 Due after ten years 286,933 252,853 Total available-for-sale securities, net (1) $ 954,297 $ 874,687 (1) The contractual maturities of our available-for-sale securities are included in the table. However, given our intent to sell certain impaired securities, these securities are classified as current assets in our Statement of Financial Position at September 30, 2022. The below securities have been evaluated and determined to be temporary declines in fair value for which we expect to recover our entire principal plus interest. The following tables present available-for-sale securities based on length of time in a gross unrealized loss position as of: September 30, 2022 Less than 12 months 12 months or longer Total (dollars in thousands) Fair Unrealized Fair Unrealized Fair Unrealized No. of Corporate debt securities $ 488,178 $ 37,243 $ 52,867 $ 7,432 $ 541,045 $ 44,675 1,030 Collateralized debt obligations 67,482 3,368 31,984 1,905 99,466 5,273 159 Commercial mortgage-backed securities 56,265 6,480 6,174 1,335 62,439 7,815 123 Residential mortgage-backed securities 104,610 13,096 23,145 5,635 127,755 18,731 157 Other debt securities 21,428 2,034 1,122 214 22,550 2,248 45 U.S. Treasury 12,205 1,061 0 0 12,205 1,061 3 Total available-for-sale securities $ 750,168 $ 63,282 $ 115,292 $ 16,521 $ 865,460 $ 79,803 1,517 Quality breakdown of available-for-sale securities: Investment grade $ 649,184 $ 51,725 $ 106,235 $ 14,782 $ 755,419 $ 66,507 770 Non-investment grade 100,984 11,557 9,057 1,739 110,041 13,296 747 Total available-for-sale securities $ 750,168 $ 63,282 $ 115,292 $ 16,521 $ 865,460 $ 79,803 1,517 December 31, 2021 Less than 12 months 12 months or longer Total (dollars in thousands) Fair Unrealized Fair Unrealized Fair Unrealized No. of Corporate debt securities $ 179,281 $ 1,912 $ 12,494 $ 583 $ 191,775 $ 2,495 441 Collateralized debt obligations 64,270 278 9,370 60 73,640 338 104 Commercial mortgage-backed securities 28,001 595 917 182 28,918 777 61 Residential mortgage-backed securities 89,460 1,278 441 24 89,901 1,302 98 Other debt securities 14,576 136 0 0 14,576 136 24 U.S. Treasury 388 7 0 0 388 7 1 Total available-for-sale securities $ 375,976 $ 4,206 $ 23,222 $ 849 $ 399,198 $ 5,055 729 Quality breakdown of available-for-sale securities: Investment grade $ 330,697 $ 3,801 $ 17,112 $ 434 $ 347,809 $ 4,235 366 Non-investment grade 45,279 405 6,110 415 51,389 820 363 Total available-for-sale securities $ 375,976 $ 4,206 $ 23,222 $ 849 $ 399,198 $ 5,055 729 Credit loss allowance on investments The current expected credit loss allowance on agent loans was $1.0 million at both September 30, 2022 and December 31, 2021. The current expected credit loss allowance on available-for-sale securities was $0.1 million at September 30, 2022 and less than $0.1 million at December 31, 2021. Net investment income Investment income (loss), net of expenses, was generated from the following portfolios: Three months ended September 30, Nine months ended September 30, (in thousands) 2022 2021 2022 2021 Available-for-sale securities $ 8,546 $ 5,786 $ 21,919 $ 17,773 Equity securities 979 1,030 2,942 3,348 Limited partnerships (1) (4,643) 11,504 (2,158) 26,701 Cash equivalents and other 1,251 862 2,901 2,774 Total investment income 6,133 19,182 25,604 50,596 Less: investment expenses 299 324 998 991 Net investment income $ 5,834 $ 18,858 $ 24,606 $ 49,605 (1) Equity in (losses) earnings of limited partnerships includes both realized gains (losses) and unrealized valuation changes. Our limited partnership investments are included in the line item "Other assets" in the Statements of Financial Position. We have made no new significant limited partnership commitments since 2006, and the balance of limited partnership investments is expected to decline over time as additional distributions are received. Realized and unrealized investment gains (losses) Realized and unrealized gains (losses) on investments were as follows: Three months ended September 30, Nine months ended September 30, (in thousands) 2022 2021 2022 2021 Available-for-sale securities: Gross realized gains $ 146 $ 2,424 $ 1,055 $ 5,422 Gross realized losses (4,752) (235) (10,163) (1,353) Net realized (losses) gains on available-for-sale securities (4,606) 2,189 (9,108) 4,069 Equity securities (1,624) (579) (14,727) 1,113 Miscellaneous 0 0 2 1 Net realized and unrealized investment (losses) gains $ (6,230) $ 1,610 $ (23,833) $ 5,183 The portion of net unrealized (losses) gains recognized during the reporting period related to equity securities held at the reporting date is calculated as follows: Three months ended September 30, Nine months ended September 30, (in thousands) 2022 2021 2022 2021 Equity securities: Net (losses) gains recognized during the period $ (1,624) $ (579) $ (14,727) $ 1,113 Less: net gains (losses) recognized on securities sold 243 (267) (1,327) 5 Net unrealized (losses) gains recognized on securities held at reporting date $ (1,867) $ (312) $ (13,400) $ 1,108 Net impairment (losses) recoveries recognized in earnings Impairments on available-for-sale securities and agent loans were as follows: Three months ended September 30, Nine months ended September 30, (in thousands) 2022 2021 2022 2021 Available-for-sale securities: Intent to sell $ (45) $ (10) $ (146) $ (10) Credit (impaired) recovered (130) (13) (283) 73 Total available-for-sale securities (175) (23) (429) 63 Agent loans - expected credit recoveries 0 153 0 153 Net impairment (losses) recoveries recognized in earnings $ (175) $ 130 $ (429) $ 216 |
Borrowing Arrangements
Borrowing Arrangements | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Borrowing Arrangements | Borrowing Arrangements Term loan credit facility In 2016, we entered into a credit agreement for a $100 million senior secured draw term loan credit facility ("Credit Facility") for the acquisition of real property and construction of an office building that now serves as part of our principal headquarters. On January 1, 2019, the Credit Facility converted to a fully-amortized term loan with monthly payments of principal and interest at a fixed rate of 4.35% over a period of 28 years. In May 2022, we repaid the remaining $93.2 million balance on the term loan. In conjunction with the payoff, pledged collateral was released and we accelerated amortization of $0.2 million related to unamortized loan origination and commitment fees which is included in interest expense in the Statement of Operations for the nine months ended September 30, 2022. Bank line of credit In October 2021, we entered into a new credit agreement with PNC Bank National Association to provide for a $100 million bank revolving line of credit with a $25 million letter of credit sublimit that expires on October 29, 2026. In May 2022, we borrowed on the line of credit to support the payoff of the term loan. As of September 30, 2022, outstanding borrowings on the line of credit had been repaid and a total of $99.1 million remains available under the facility due to $0.9 million outstanding letters of credit, which reduce availability for letters of credit to $24.1 million. Investments with a fair value of $108.7 million were pledged as collateral on the line of credit at September 30, 2022. These investments have no trading restrictions and are reported as available-for-sale securities and cash and cash equivalents on our Statement of Financial Position as of September 30, 2022. The bank requires compliance with certain covenants, which include leverage ratios and debt restrictions, for our line of credit. We are in compliance with all covenants at September 30, 2022. |
Postretirement Benefits
Postretirement Benefits | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Postretirement Benefits | Postretirement Benefits Pension plans Our pension plans consist of a noncontributory defined benefit pension plan covering substantially all employees and an unfunded supplemental employee retirement plan for certain members of executive and senior management. Although we are the sponsor of these postretirement plans and record the funded status of these plans, the Exchange and its subsidiaries reimburse us for approximately 57% of the annual benefit expense of these plans, which represents pension benefits for employees performing administrative services and their allocated share of costs for employees in departments that support the administrative functions. Our funding policy is generally to contribute an amount equal to the greater of the target normal cost for the plan year, or the amount necessary to fund the plan to 100%. Accordingly, we made a $25 million contribution during the third quarter of 2022. The cost of our pension plans are as follows: Three months ended September 30, Nine months ended September 30, (in thousands) 2022 2021 2022 2021 Service cost for benefits earned $ 12,560 $ 13,260 $ 37,681 $ 39,780 Interest cost on benefits obligation 9,941 9,206 29,823 27,618 Expected return on plan assets (13,639) (12,569) (40,917) (37,706) Prior service cost amortization 361 357 1,082 1,071 Net actuarial loss amortization 1,830 4,027 5,490 12,080 Pension plan cost (1) $ 11,053 $ 14,281 $ 33,159 $ 42,843 (1) The components of pension plan costs other than the service cost component are included in the line item "Other income (expense)" in the Statements of Operations after reimbursements from the Exchange and its subsidiaries. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense is provided on an interim basis based upon our estimate of the annual effective income tax rate, adjusted each quarter for discrete items. For the three months ended September 30, 2022 and 2021, our effective tax rate was 20.7% and 20.9%, respectively. For the nine months ended September 30, 2022 and 2021, our effective tax rate was 20.9% and 20.8%, respectively. |
Capital Stock
Capital Stock | 9 Months Ended |
Sep. 30, 2022 | |
Class of Stock Disclosures [Abstract] | |
Capital Stock | Capital Stock Class A and B common stock Holders of Class B shares may, at their option, convert their shares into Class A shares at the rate of 2,400 Class A shares per Class B share. There were no shares of Class B common stock converted into Class A common stock during the nine months ended September 30, 2022 and the year ended December 31, 2021. There is no provision for conversion of Class A shares into Class B shares, and Class B shares surrendered for conversion cannot be reissued. Stock repurchases In 2011, our Board of Directors approved a continuation of the current stock repurchase program of $150 million, with no time limitation. There were no shares repurchased under this program during the nine months ended September 30, 2022 and the year ended December 31, 2021. We had approximately $17.8 million of repurchase authority remaining under this program at September 30, 2022. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Changes in accumulated other comprehensive income ("AOCI") (loss) by component, including amounts reclassified to other comprehensive income ("OCI") (loss) and the related line item in the Statements of Operations where net income is presented, are as follows: Three months ended Three months ended September 30, 2022 September 30, 2021 (in thousands) Before Tax Income Tax Net Before Tax Income Tax Net Investment securities: AOCI (loss), beginning of period $ (57,980) $ (12,177) $ (45,803) $ 21,693 $ 4,556 $ 17,137 OCI (loss) before reclassifications (26,524) (5,570) (20,954) (2,557) (537) (2,020) Realized investment losses (gains) 4,606 968 3,638 (2,189) (459) (1,730) Impairment losses 175 37 138 23 5 18 OCI (loss) (21,743) (4,565) (17,178) (4,723) (991) (3,732) AOCI (loss), end of period $ (79,723) $ (16,742) $ (62,981) $ 16,970 $ 3,565 $ 13,405 Pension and other postretirement plans: AOCI (loss), beginning of period $ (35,346) $ (7,424) $ (27,922) $ (119,533) $ (25,103) $ (94,430) Amortization of prior service costs 361 76 285 357 75 282 Amortization of net actuarial loss 1,830 384 1,446 4,027 846 3,181 OCI 2,191 460 1,731 4,384 921 3,463 AOCI (loss), end of period $ (33,155) $ (6,964) $ (26,191) $ (115,149) $ (24,182) $ (90,967) Total AOCI (loss), beginning of period $ (93,326) $ (19,601) $ (73,725) $ (97,840) $ (20,547) $ (77,293) Investment securities (21,743) (4,565) (17,178) (4,723) (991) (3,732) Pension and other postretirement plans 2,191 460 1,731 4,384 921 3,463 OCI (loss) (19,552) (4,105) (15,447) (339) (70) (269) AOCI (loss), end of period $ (112,878) $ (23,706) $ (89,172) $ (98,179) $ (20,617) $ (77,562) Nine months ended Nine months ended September 30, 2022 September 30, 2021 (in thousands) Before Tax Income Tax Net Before Tax Income Tax Net Investment securities: AOCI, beginning of period $ 7,722 $ 1,621 $ 6,101 $ 29,384 $ 6,171 $ 23,213 OCI (loss) before reclassifications (96,982) (20,366) (76,616) (8,282) (1,739) (6,543) Realized investment losses (gains) 9,108 1,913 7,195 (4,069) (854) (3,215) Impairment losses (recoveries) 429 90 339 (63) (13) (50) OCI (loss) (87,445) (18,363) (69,082) (12,414) (2,606) (9,808) AOCI (loss), end of period $ (79,723) $ (16,742) $ (62,981) $ 16,970 $ 3,565 $ 13,405 Pension and other postretirement plans: AOCI (loss), beginning of period $ (39,734) $ (8,345) $ (31,389) $ (128,300) $ (26,944) $ (101,356) Amortization of prior service costs 1,082 227 855 1,071 225 846 Amortization of net actuarial loss 5,497 1,154 4,343 12,080 2,537 9,543 OCI 6,579 1,381 5,198 13,151 2,762 10,389 AOCI (loss), end of period $ (33,155) $ (6,964) $ (26,191) $ (115,149) $ (24,182) $ (90,967) Total AOCI (loss), beginning of period $ (32,012) $ (6,724) $ (25,288) $ (98,916) $ (20,773) $ (78,143) Investment securities (87,445) (18,363) (69,082) (12,414) (2,606) (9,808) Pension and other postretirement plans 6,579 1,381 5,198 13,151 2,762 10,389 OCI (loss) (80,866) (16,982) (63,884) 737 156 581 AOCI (loss), end of period $ (112,878) $ (23,706) $ (89,172) $ (98,179) $ (20,617) $ (77,562) |
Concentrations of Credit Risk
Concentrations of Credit Risk | 9 Months Ended |
Sep. 30, 2022 | |
Risks and Uncertainties [Abstract] | |
Concentrations of Credit Risk | Concentrations of Credit RiskFinancial instruments could potentially expose us to concentrations of credit risk, including unsecured receivables from the Exchange. A large majority of our revenue and receivables are from the Exchange and its affiliates. See also Note 1, "Nature of Operations". Net management fee amounts and other reimbursements due from the Exchange and its affiliates were $544.4 million and $479.1 million at September 30, 2022 and December 31, 2021, respectively, which includes a current expected credit loss allowance of $0.5 million in both periods. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In 2020, we entered into an agreement with a bank for the establishment of a loan participation program for agent loans. The maximum amount of loans to be funded through this program is $100 million. We have committed to fund a minimum of 30% of each loan executed through this program. As of September 30, 2022, loans executed under this agreement totaled $47.3 million, of which our portion of the loans is $16.3 million. Additionally, we have agreed to guarantee a portion of the funding provided by the other participants in the program in the event of default. As of September 30, 2022, our maximum potential amount of future payments on the guaranteed portion is $5.8 million. All loan payments under the participation program are current as of September 30, 2022. We are involved in litigation arising in the ordinary course of conducting business. In accordance with current accounting standards for loss contingencies and based upon information currently known to us, we establish reserves for litigation when it is probable that a loss associated with a claim or proceeding has been incurred and the amount of the loss or range of loss can be reasonably estimated. When no amount within the range of loss is a better estimate than any other amount, we accrue the minimum amount of the estimable loss. To the extent that such litigation against us may have an exposure to a loss in excess of the amount we have accrued, we believe that such excess would not be material to our financial condition, results of operations, or cash flows. Legal fees are expensed as incurred. We believe that our accruals for legal proceedings are appropriate and, individually and in the aggregate, are not expected to be material to our financial condition, results of operations, or cash flows. We review all litigation on an ongoing basis when making accrual and disclosure decisions. For certain legal proceedings, we cannot reasonably estimate losses or a range of loss, if any, particularly for proceedings that are in their early stages of development or where the plaintiffs seek indeterminate damages. Various factors, including, but not limited to, the outcome of potentially lengthy discovery and the resolution of important factual questions, may need to be determined before probability can be established or before a loss or range of loss can be reasonably estimated. If the loss contingency in question is not both probable and reasonably estimable, we do not establish an accrual and the matter will continue to be monitored for any developments that would make the loss contingency both probable and reasonably estimable. In the event that a legal proceeding results in a substantial judgment against, or settlement by, us, there can be no assurance that any resulting liability or financial commitment would not have a material adverse effect on the financial condition, results of operations, or cash flows. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsNo items were identified in this period subsequent to the financial statement date that required adjustment or additional disclosure. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. For further information, refer to the financial statements and footnotes included in our Form 10-K for the year ended December 31, 2021 as filed with the Securities and Exchange Commission on February 24, 2022. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Revenue | The majority of our revenue is derived from the subscriber’s agreement between us and the subscribers (policyholders) at the Exchange. Pursuant to the subscriber’s agreement, we earn a management fee calculated as a percentage, not to exceed 25%, of all direct and affiliated assumed written premiums of the Exchange. We allocate a portion of our management fee revenue, currently 25% of the direct and affiliated assumed written premiums of the Exchange, between the two performance obligations we have under the subscriber’s agreement. The first performance obligation is to provide policy issuance and renewal services to the subscribers (policyholders) at the Exchange, and the second is to act as attorney-in-fact on behalf of the Exchange, as well as the service provider for its insurance subsidiaries, with respect to all administrative services. The transaction price, including management fee revenue and administrative services reimbursement revenue, includes variable consideration and is allocated based on the estimated standalone selling prices developed using industry information and other available information for similar services. A constraining estimate of variable consideration exists related to the potential for management fees to be returned if a policy were to be cancelled mid-term. Management fees are returned to the Exchange when policyholders cancel their insurance coverage mid-term and premiums are refunded to them. The constraining estimate is determined using the expected value method, based on both historical and current information. The estimated transaction price, as reduced by the constraint, reflects consideration expected for performance of our services. We update the transaction price and the related allocation at least annually based upon the most recent information available or more frequently if there have been significant changes in any components considered in the transaction price. The first performance obligation is to provide policy issuance and renewal services that result in executed insurance policies between the Exchange or one of its insurance subsidiaries and the subscriber (policyholder). The subscriber (policyholder) receives economic benefits when substantially all the policy issuance or renewal services are complete and an insurance policy is issued or renewed by the Exchange or one of its insurance subsidiaries. It is at the time of policy issuance or renewal that the allocated portion of revenue is recognized. |
Earnings per share | Class A and Class B basic earnings per share and Class B diluted earnings per share are calculated under the two-class method. The two-class method allocates earnings to each class of stock based upon its dividend rights. Class B shares are convertible into Class A shares at a conversion ratio of 2,400 to 1. See Note 10, "Capital Stock".Class A diluted earnings per share are calculated under the if-converted method, which reflects the conversion of Class B shares to Class A shares. Diluted earnings per share calculations include the dilutive effect of assumed issuance of stock-based awards under compensation plans that have the option to be paid in stock using the treasury stock method. |
Financial instruments carried at fair value | Financial instruments carried at fair value Our available-for-sale and equity securities are recorded at fair value, which is the price that would be received to sell the asset in an orderly transaction between willing market participants as of the measurement date. Valuation techniques used to derive the fair value of our available-for-sale and equity securities are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources. Unobservable inputs reflect our own assumptions regarding fair market value for these securities. Financial instruments are categorized based upon the following characteristics or inputs to the valuation techniques: • Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. • Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. • Level 3 – Unobservable inputs for the asset or liability. Estimates of fair values for our investment portfolio are obtained primarily from a nationally recognized pricing service. Our Level 1 securities are valued using an exchange traded price provided by the pricing service. Pricing service valuations for Level 2 securities include multiple verifiable, observable inputs including benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data. Pricing service valuations for Level 3 securities are based upon proprietary models and are used when observable inputs are not available or in illiquid markets. Although virtually all of our prices are obtained from third party sources, we also perform internal pricing reviews, including evaluating the methodology and inputs used to ensure that we determine the proper classification level of the financial instrument and reviewing securities with price changes that vary significantly from current market conditions or independent price sources. Price variances are investigated and corroborated by market data and transaction volumes. We have reviewed the pricing methodologies of our pricing service as well as other observable inputs and believe that the prices adequately consider market activity in determining fair value. In limited circumstances we adjust the price received from the pricing service when, in our judgment, a better reflection of fair value is available based upon corroborating information and our knowledge and monitoring of market conditions such as a disparity in price of comparable securities and/or non-binding broker quotes. In other circumstances, certain securities are internally priced because prices are not provided by the pricing service. When a price from the pricing service is not available, values are determined by obtaining broker/dealer quotes and/or market comparables. When available, we obtain multiple quotes for the same security. The ultimate value for these securities is determined based upon our best estimate of fair value using corroborating market information. As of September 30, 2022, nearly all of our available-for-sale and equity securities were priced using a third party pricing service. |
Fair value of financial instruments, transfers between levels | We review the fair value hierarchy classifications each reporting period. Transfers between hierarchy levels may occur due to changes in available market observable inputs. |
Commitments and contingencies | We are involved in litigation arising in the ordinary course of conducting business. In accordance with current accounting standards for loss contingencies and based upon information currently known to us, we establish reserves for litigation when it is probable that a loss associated with a claim or proceeding has been incurred and the amount of the loss or range of loss can be reasonably estimated. When no amount within the range of loss is a better estimate than any other amount, we accrue the minimum amount of the estimable loss. To the extent that such litigation against us may have an exposure to a loss in excess of the amount we have accrued, we believe that such excess would not be material to our financial condition, results of operations, or cash flows. Legal fees are expensed as incurred. We believe that our accruals for legal proceedings are appropriate and, individually and in the aggregate, are not expected to be material to our financial condition, results of operations, or cash flows. We review all litigation on an ongoing basis when making accrual and disclosure decisions. For certain legal proceedings, we cannot reasonably estimate losses or a range of loss, if any, particularly for proceedings that are in their early stages of development or where the plaintiffs seek indeterminate damages. Various factors, including, but not limited to, the outcome of potentially lengthy discovery and the resolution of important factual questions, may need to be determined before probability can be established or before a loss or range of loss can be reasonably estimated. If the loss contingency in question is not both probable and reasonably estimable, we do not establish an accrual and the matter will continue to be monitored for any developments that would make the loss contingency both probable and reasonably estimable. In the event that a legal proceeding results in a substantial judgment against, or settlement by, us, there can be no assurance that any resulting liability or financial commitment would not have a material adverse effect on the financial condition, results of operations, or cash flows. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue by Performance Obligation | The following table disaggregates revenue by our two performance obligations: Three months ended September 30, Nine months ended September 30, (in thousands) 2022 2021 2022 2021 Management fee revenue - policy issuance and renewal services $ 551,666 $ 504,891 $ 1,584,213 $ 1,462,880 Management fee revenue - administrative services 14,657 14,471 43,446 43,985 Administrative services reimbursement revenue 168,653 162,410 492,655 473,133 Total administrative services revenue $ 183,310 $ 176,881 $ 536,101 $ 517,118 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of the Numerators and Denominators Used in the Basic and Diluted Per-Share Computations | A reconciliation of the numerators and denominators used in the basic and diluted per-share computations is presented as follows for each class of common stock: Three months ended September 30, 2022 2021 (dollars in thousands, except per share data) Allocated net income (numerator) Weighted shares (denominator) Per-share amount Allocated net income (numerator) Weighted shares (denominator) Per-share amount Class A – Basic EPS: Income available to Class A stockholders $ 83,623 46,189,025 $ 1.81 $ 89,484 46,189,035 $ 1.94 Dilutive effect of stock-based awards 0 6,586 — 0 15,410 — Assumed conversion of Class B shares 690 6,100,800 — 739 6,100,800 — Class A – Diluted EPS: Income available to Class A stockholders on Class A equivalent shares $ 84,313 52,296,411 $ 1.61 $ 90,223 52,305,245 $ 1.72 Class B – Basic and diluted EPS: Income available to Class B stockholders $ 690 2,542 $ 272 $ 739 2,542 $ 291 Nine months ended September 30, 2022 2021 (dollars in thousands, except per share data) Allocated net income (numerator) Weighted shares (denominator) Per-share amount Allocated net income (numerator) Weighted shares (denominator) Per-share amount Class A – Basic EPS: Income available to Class A stockholders $ 231,171 46,188,878 $ 5.00 $ 240,830 46,188,729 $ 5.21 Dilutive effect of stock-based awards 0 8,007 — 0 18,330 — Assumed conversion of Class B shares 1,908 6,100,800 — 1,988 6,100,800 — Class A – Diluted EPS: Income available to Class A stockholders on Class A equivalent shares $ 233,079 52,297,685 $ 4.46 $ 242,818 52,307,859 $ 4.64 Class B – Basic and diluted EPS: Income available to Class B stockholders $ 1,908 2,542 $ 751 $ 1,988 2,542 $ 782 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurements on a Recurring Basis by Asset Class and Level of Input | The following tables present our fair value measurements on a recurring basis by asset class and level of input as of: September 30, 2022 (in thousands) Total Level 1 Level 2 Level 3 Available-for-sale securities: Corporate debt securities $ 547,193 $ 0 $ 539,918 $ 7,275 Collateralized debt obligations 100,671 0 100,671 0 Commercial mortgage-backed securities 63,217 0 57,850 5,367 Residential mortgage-backed securities 128,546 0 124,884 3,662 Other debt securities 22,855 0 22,855 0 U.S. Treasury 12,205 0 12,205 0 Total available-for-sale securities 874,687 0 858,383 16,304 Equity securities: Financial services sector 57,595 0 55,747 1,848 Utilities sector 6,072 0 6,072 0 Energy sector 3,513 0 3,513 0 Consumer sector 1,418 0 1,418 0 Communications sector 371 0 371 0 Total equity securities 68,969 0 67,121 1,848 Total $ 943,656 $ 0 $ 925,504 $ 18,152 December 31, 2021 (in thousands) Total Level 1 Level 2 Level 3 Available-for-sale securities: Corporate debt securities $ 573,165 $ 0 $ 567,909 $ 5,256 Collateralized debt obligations 115,462 0 115,462 0 Commercial mortgage-backed securities 89,324 0 73,596 15,728 Residential mortgage-backed securities 139,922 0 131,108 8,814 Other debt securities 23,920 0 23,920 0 U.S. Treasury 4,292 0 4,292 0 Total available-for-sale securities 946,085 0 916,287 29,798 Equity securities: Financial services sector 71,722 1,624 68,015 2,083 Utilities sector 6,259 0 6,259 0 Energy sector 6,448 10 6,438 0 Consumer sector 3,314 0 3,314 0 Total equity securities 87,743 1,634 84,026 2,083 Total $ 1,033,828 $ 1,634 $ 1,000,313 $ 31,881 |
Schedule of Roll Forward of Level 3 Fair Value Measurements on a Recurring Basis | Level 3 Assets – 2022 Quarterly Change: (in thousands) Beginning balance at June 30, 2022 Included in earnings (1) Included Purchases Sales Transfers into Level 3 (2) Transfers out of Level 3 (2) Ending balance at September 30, 2022 Available-for-sale securities: Corporate debt securities $ 6,109 $ (7) $ (28) $ 753 $ (495) $ 2,899 $ (1,956) $ 7,275 Commercial mortgage-backed securities 8,871 (188) (413) 0 (660) 1,174 (3,417) 5,367 Residential mortgage-backed securities 42,549 (667) (1,708) 0 (6,626) 674 (30,560) 3,662 Total available-for-sale securities 57,529 (862) (2,149) 753 (7,781) 4,747 (35,933) 16,304 Equity securities 1,866 (18) 0 0 0 0 0 1,848 Total Level 3 securities $ 59,395 $ (880) $ (2,149) $ 753 $ (7,781) $ 4,747 $ (35,933) $ 18,152 Level 3 Assets – 2022 Year-to-Date Change: (in thousands) Beginning balance at December 31, 2021 Included in earnings (1) Included Purchases Sales Transfers into Level 3 (2) Transfers out of Level 3 (2) Ending balance at September 30, 2022 Available-for-sale securities: Corporate debt securities $ 5,256 $ (2) $ (417) $ 5,687 $ (3,614) $ 8,673 $ (8,308) $ 7,275 Commercial mortgage-backed securities 15,728 (892) (1,071) 0 (3,825) 5,509 (10,082) 5,367 Residential mortgage-backed securities 8,814 (643) (2,042) 4,887 (9,472) 38,214 (36,096) 3,662 Total available-for-sale securities 29,798 (1,537) (3,530) 10,574 (16,911) 52,396 (54,486) 16,304 Equity securities 2,083 (235) 0 0 0 0 0 1,848 Total Level 3 securities $ 31,881 $ (1,772) $ (3,530) $ 10,574 $ (16,911) $ 52,396 $ (54,486) $ 18,152 Level 3 Assets – 2021 Quarterly Change: (in thousands) Beginning balance at June 30, 2021 Included in earnings (1) Included Purchases Sales Transfers into Level 3 (2) Transfers out of Level 3 (2) Ending balance at September 30, 2021 Available-for-sale securities: Corporate debt securities $ 6,078 $ 7 $ 3 $ 1,995 $ (1,213) $ 1,129 $ (1,802) $ 6,197 Collateralized debt obligations 750 0 0 0 0 0 (750) 0 Commercial mortgage-backed securities 17,133 (90) (143) 229 (2,912) 0 (4,523) 9,694 Residential mortgage-backed securities 3,041 (5) (26) 0 (366) 4,288 (2,644) 4,288 Other debt securities 2,544 0 1 0 (757) 0 (1,334) 454 Total available-for-sale securities 29,546 (88) (165) 2,224 (5,248) 5,417 (11,053) 20,633 Equity securities 1,000 13 0 0 0 1,093 0 2,106 Total Level 3 securities $ 30,546 $ (75) $ (165) $ 2,224 $ (5,248) $ 6,510 $ (11,053) $ 22,739 Level 3 Assets – 2021 Year-to-Date Change: (in thousands) Beginning balance at December 31, 2020 Included in earnings (1) Included Purchases Sales Transfers into Level 3 (2) Transfers out of Level 3 (2) Ending balance at September 30, 2021 Available-for-sale securities: Corporate debt securities $ 5,825 $ 27 $ 82 $ 4,253 $ (1,886) $ 3,678 $ (5,782) $ 6,197 Collateralized debt obligations 0 0 0 750 0 0 (750) 0 Commercial mortgage-backed securities 19,462 (287) (590) 3,073 (3,878) 3,854 (11,940) 9,694 Residential mortgage-backed securities 937 (11) (26) 0 (842) 7,318 (3,088) 4,288 Other debt securities 0 0 (1) 2,588 (799) 0 (1,334) 454 Total available-for-sale securities 26,224 (271) (535) 10,664 (7,405) 14,850 (22,894) 20,633 Equity securities 0 18 0 1,000 0 2,183 (1,095) 2,106 Total Level 3 securities $ 26,224 $ (253) $ (535) $ 11,664 $ (7,405) $ 17,033 $ (23,989) $ 22,739 (1) These amounts are reported as net investment income and net realized and unrealized investment (losses) gains for each of the periods presented above. (2) Transfers into and/or (out) of Level 3 are primarily attributable to the availability of market observable information and the re-evaluation of the observability of pricing inputs. |
Schedule of Financial Instruments Not Carried at Fair Value | The following table presents the carrying values and fair values of financial instruments categorized as Level 3 in the fair value hierarchy that are recorded at carrying value as of: September 30, 2022 December 31, 2021 (in thousands) Carrying value Fair value Carrying value Fair value Agent loans (1) $ 69,425 $ 57,457 $ 66,368 $ 68,957 Long-term borrowings — — 94,070 103,981 (1) The discount rate used to calculate fair value at September 30, 2022 is reflective of an increase in the BB+ financial yield curve. |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Investments [Abstract] | |
Schedule of Reconciliation of Cost to Fair Value, Net of Credit Loss Allowance, of Available-For-Sale Securities | The following tables summarize the cost and estimated fair value, net of credit loss allowance, of our available-for-sale securities as of: September 30, 2022 (in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Corporate debt securities $ 591,682 $ 186 $ 44,675 $ 547,193 Collateralized debt obligations 105,938 6 5,273 100,671 Commercial mortgage-backed securities 71,032 0 7,815 63,217 Residential mortgage-backed securities 147,276 1 18,731 128,546 Other debt securities 25,103 0 2,248 22,855 U.S. Treasury 13,266 0 1,061 12,205 Total available-for-sale securities, net $ 954,297 $ 193 $ 79,803 $ 874,687 December 31, 2021 (in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Corporate debt securities $ 565,997 $ 9,663 $ 2,495 $ 573,165 Collateralized debt obligations 115,344 456 338 115,462 Commercial mortgage-backed securities 88,636 1,465 777 89,324 Residential mortgage-backed securities 140,217 1,007 1,302 139,922 Other debt securities 23,859 197 136 23,920 U.S. Treasury 4,226 73 7 4,292 Total available-for-sale securities, net $ 938,279 $ 12,861 $ 5,055 $ 946,085 |
Schedule of Amortized Cost and Estimated Fair Value, Net of Credit Loss Allowance, of Available-For-Sale Securities by Remaining Contractual Term to Maturity | The amortized cost and estimated fair value of available-for-sale securities at September 30, 2022 are shown below by remaining contractual term to maturity. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. September 30, 2022 Amortized Estimated (in thousands) cost fair value Due in one year or less $ 25,891 $ 25,558 Due after one year through five years 424,086 396,166 Due after five years through ten years 217,387 200,110 Due after ten years 286,933 252,853 Total available-for-sale securities, net (1) $ 954,297 $ 874,687 (1) The contractual maturities of our available-for-sale securities are included in the table. However, given our intent to sell certain impaired securities, these securities are classified as current assets in our Statement of Financial Position at September 30, 2022. |
Schedule of Available -For-Sale Securities in a Gross Unrealized Loss Position by Length of Time | The below securities have been evaluated and determined to be temporary declines in fair value for which we expect to recover our entire principal plus interest. The following tables present available-for-sale securities based on length of time in a gross unrealized loss position as of: September 30, 2022 Less than 12 months 12 months or longer Total (dollars in thousands) Fair Unrealized Fair Unrealized Fair Unrealized No. of Corporate debt securities $ 488,178 $ 37,243 $ 52,867 $ 7,432 $ 541,045 $ 44,675 1,030 Collateralized debt obligations 67,482 3,368 31,984 1,905 99,466 5,273 159 Commercial mortgage-backed securities 56,265 6,480 6,174 1,335 62,439 7,815 123 Residential mortgage-backed securities 104,610 13,096 23,145 5,635 127,755 18,731 157 Other debt securities 21,428 2,034 1,122 214 22,550 2,248 45 U.S. Treasury 12,205 1,061 0 0 12,205 1,061 3 Total available-for-sale securities $ 750,168 $ 63,282 $ 115,292 $ 16,521 $ 865,460 $ 79,803 1,517 Quality breakdown of available-for-sale securities: Investment grade $ 649,184 $ 51,725 $ 106,235 $ 14,782 $ 755,419 $ 66,507 770 Non-investment grade 100,984 11,557 9,057 1,739 110,041 13,296 747 Total available-for-sale securities $ 750,168 $ 63,282 $ 115,292 $ 16,521 $ 865,460 $ 79,803 1,517 December 31, 2021 Less than 12 months 12 months or longer Total (dollars in thousands) Fair Unrealized Fair Unrealized Fair Unrealized No. of Corporate debt securities $ 179,281 $ 1,912 $ 12,494 $ 583 $ 191,775 $ 2,495 441 Collateralized debt obligations 64,270 278 9,370 60 73,640 338 104 Commercial mortgage-backed securities 28,001 595 917 182 28,918 777 61 Residential mortgage-backed securities 89,460 1,278 441 24 89,901 1,302 98 Other debt securities 14,576 136 0 0 14,576 136 24 U.S. Treasury 388 7 0 0 388 7 1 Total available-for-sale securities $ 375,976 $ 4,206 $ 23,222 $ 849 $ 399,198 $ 5,055 729 Quality breakdown of available-for-sale securities: Investment grade $ 330,697 $ 3,801 $ 17,112 $ 434 $ 347,809 $ 4,235 366 Non-investment grade 45,279 405 6,110 415 51,389 820 363 Total available-for-sale securities $ 375,976 $ 4,206 $ 23,222 $ 849 $ 399,198 $ 5,055 729 |
Schedule of Investment Income (Loss), Net of Expenses, from Portfolios | Investment income (loss), net of expenses, was generated from the following portfolios: Three months ended September 30, Nine months ended September 30, (in thousands) 2022 2021 2022 2021 Available-for-sale securities $ 8,546 $ 5,786 $ 21,919 $ 17,773 Equity securities 979 1,030 2,942 3,348 Limited partnerships (1) (4,643) 11,504 (2,158) 26,701 Cash equivalents and other 1,251 862 2,901 2,774 Total investment income 6,133 19,182 25,604 50,596 Less: investment expenses 299 324 998 991 Net investment income $ 5,834 $ 18,858 $ 24,606 $ 49,605 (1) Equity in (losses) earnings of limited partnerships includes both realized gains (losses) and unrealized valuation changes. Our limited partnership investments are included in the line item "Other assets" in the Statements of Financial Position. We have made no new significant limited partnership commitments since 2006, and the balance of limited partnership investments is expected to decline over time as additional distributions are received. |
Schedule of Realized and Unrealized Gains and Losses on Investments and Net Unrealized Gains and Losses Recognized during the Reporting Period Related to Equity Securities Held at the Reporting Date | Realized and unrealized gains (losses) on investments were as follows: Three months ended September 30, Nine months ended September 30, (in thousands) 2022 2021 2022 2021 Available-for-sale securities: Gross realized gains $ 146 $ 2,424 $ 1,055 $ 5,422 Gross realized losses (4,752) (235) (10,163) (1,353) Net realized (losses) gains on available-for-sale securities (4,606) 2,189 (9,108) 4,069 Equity securities (1,624) (579) (14,727) 1,113 Miscellaneous 0 0 2 1 Net realized and unrealized investment (losses) gains $ (6,230) $ 1,610 $ (23,833) $ 5,183 The portion of net unrealized (losses) gains recognized during the reporting period related to equity securities held at the reporting date is calculated as follows: Three months ended September 30, Nine months ended September 30, (in thousands) 2022 2021 2022 2021 Equity securities: Net (losses) gains recognized during the period $ (1,624) $ (579) $ (14,727) $ 1,113 Less: net gains (losses) recognized on securities sold 243 (267) (1,327) 5 Net unrealized (losses) gains recognized on securities held at reporting date $ (1,867) $ (312) $ (13,400) $ 1,108 |
Schedule of Impairments on Available-For-Sale Securities and Agent Loans | Impairments on available-for-sale securities and agent loans were as follows: Three months ended September 30, Nine months ended September 30, (in thousands) 2022 2021 2022 2021 Available-for-sale securities: Intent to sell $ (45) $ (10) $ (146) $ (10) Credit (impaired) recovered (130) (13) (283) 73 Total available-for-sale securities (175) (23) (429) 63 Agent loans - expected credit recoveries 0 153 0 153 Net impairment (losses) recoveries recognized in earnings $ (175) $ 130 $ (429) $ 216 |
Postretirement Benefits (Tables
Postretirement Benefits (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Cost of Pension Plans | The cost of our pension plans are as follows: Three months ended September 30, Nine months ended September 30, (in thousands) 2022 2021 2022 2021 Service cost for benefits earned $ 12,560 $ 13,260 $ 37,681 $ 39,780 Interest cost on benefits obligation 9,941 9,206 29,823 27,618 Expected return on plan assets (13,639) (12,569) (40,917) (37,706) Prior service cost amortization 361 357 1,082 1,071 Net actuarial loss amortization 1,830 4,027 5,490 12,080 Pension plan cost (1) $ 11,053 $ 14,281 $ 33,159 $ 42,843 (1) The components of pension plan costs other than the service cost component are included in the line item "Other income (expense)" in the Statements of Operations after reimbursements from the Exchange and its subsidiaries. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Income (Loss) by Component, Including Amounts Reclassified to Other Comprehensive Income (Loss) and the Related Line Item in the Statements of Operations Where Net Income is Presented | Changes in accumulated other comprehensive income ("AOCI") (loss) by component, including amounts reclassified to other comprehensive income ("OCI") (loss) and the related line item in the Statements of Operations where net income is presented, are as follows: Three months ended Three months ended September 30, 2022 September 30, 2021 (in thousands) Before Tax Income Tax Net Before Tax Income Tax Net Investment securities: AOCI (loss), beginning of period $ (57,980) $ (12,177) $ (45,803) $ 21,693 $ 4,556 $ 17,137 OCI (loss) before reclassifications (26,524) (5,570) (20,954) (2,557) (537) (2,020) Realized investment losses (gains) 4,606 968 3,638 (2,189) (459) (1,730) Impairment losses 175 37 138 23 5 18 OCI (loss) (21,743) (4,565) (17,178) (4,723) (991) (3,732) AOCI (loss), end of period $ (79,723) $ (16,742) $ (62,981) $ 16,970 $ 3,565 $ 13,405 Pension and other postretirement plans: AOCI (loss), beginning of period $ (35,346) $ (7,424) $ (27,922) $ (119,533) $ (25,103) $ (94,430) Amortization of prior service costs 361 76 285 357 75 282 Amortization of net actuarial loss 1,830 384 1,446 4,027 846 3,181 OCI 2,191 460 1,731 4,384 921 3,463 AOCI (loss), end of period $ (33,155) $ (6,964) $ (26,191) $ (115,149) $ (24,182) $ (90,967) Total AOCI (loss), beginning of period $ (93,326) $ (19,601) $ (73,725) $ (97,840) $ (20,547) $ (77,293) Investment securities (21,743) (4,565) (17,178) (4,723) (991) (3,732) Pension and other postretirement plans 2,191 460 1,731 4,384 921 3,463 OCI (loss) (19,552) (4,105) (15,447) (339) (70) (269) AOCI (loss), end of period $ (112,878) $ (23,706) $ (89,172) $ (98,179) $ (20,617) $ (77,562) Nine months ended Nine months ended September 30, 2022 September 30, 2021 (in thousands) Before Tax Income Tax Net Before Tax Income Tax Net Investment securities: AOCI, beginning of period $ 7,722 $ 1,621 $ 6,101 $ 29,384 $ 6,171 $ 23,213 OCI (loss) before reclassifications (96,982) (20,366) (76,616) (8,282) (1,739) (6,543) Realized investment losses (gains) 9,108 1,913 7,195 (4,069) (854) (3,215) Impairment losses (recoveries) 429 90 339 (63) (13) (50) OCI (loss) (87,445) (18,363) (69,082) (12,414) (2,606) (9,808) AOCI (loss), end of period $ (79,723) $ (16,742) $ (62,981) $ 16,970 $ 3,565 $ 13,405 Pension and other postretirement plans: AOCI (loss), beginning of period $ (39,734) $ (8,345) $ (31,389) $ (128,300) $ (26,944) $ (101,356) Amortization of prior service costs 1,082 227 855 1,071 225 846 Amortization of net actuarial loss 5,497 1,154 4,343 12,080 2,537 9,543 OCI 6,579 1,381 5,198 13,151 2,762 10,389 AOCI (loss), end of period $ (33,155) $ (6,964) $ (26,191) $ (115,149) $ (24,182) $ (90,967) Total AOCI (loss), beginning of period $ (32,012) $ (6,724) $ (25,288) $ (98,916) $ (20,773) $ (78,143) Investment securities (87,445) (18,363) (69,082) (12,414) (2,606) (9,808) Pension and other postretirement plans 6,579 1,381 5,198 13,151 2,762 10,389 OCI (loss) (80,866) (16,982) (63,884) 737 156 581 AOCI (loss), end of period $ (112,878) $ (23,706) $ (89,172) $ (98,179) $ (20,617) $ (77,562) |
Nature of Operations (Details)
Nature of Operations (Details) | 9 Months Ended |
Sep. 30, 2022 obligation | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Performance obligations under subscriber's agreement | 2 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) obligation | Sep. 30, 2021 USD ($) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Indemnity's management fee rate as a percent of direct and affiliated assumed written premiums of the Exchange | 25% | |||
Performance obligations under subscriber's agreement | obligation | 2 | |||
Revenue recognized that was included in the contract liability at prior year-end | $ | $ 7.4 | $ 7.8 | $ 30.1 | $ 31.7 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Performance obligation, satisfaction period | 4 years | 4 years |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenues By Performance Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of revenue by performance obligation | ||||
Revenue | $ 741,236 | $ 687,839 | $ 2,139,489 | $ 1,998,046 |
Management fee revenue - policy issuance and renewal services | ||||
Disaggregation of revenue by performance obligation | ||||
Revenue | 551,666 | 504,891 | 1,584,213 | 1,462,880 |
Management fee revenue - policy issuance and renewal services | Transferred at point in time | ||||
Disaggregation of revenue by performance obligation | ||||
Revenue | 551,666 | 504,891 | 1,584,213 | 1,462,880 |
Administrative services | Transferred over time | ||||
Disaggregation of revenue by performance obligation | ||||
Revenue | 183,310 | 176,881 | 536,101 | 517,118 |
Management fee revenue - administrative services | ||||
Disaggregation of revenue by performance obligation | ||||
Revenue | 14,657 | 14,471 | 43,446 | 43,985 |
Management fee revenue - administrative services | Transferred over time | ||||
Disaggregation of revenue by performance obligation | ||||
Revenue | 14,657 | 14,471 | 43,446 | 43,985 |
Administrative services reimbursement revenue | ||||
Disaggregation of revenue by performance obligation | ||||
Revenue | 168,653 | 162,410 | 492,655 | 473,133 |
Administrative services reimbursement revenue | Transferred over time | ||||
Disaggregation of revenue by performance obligation | ||||
Revenue | $ 168,653 | $ 162,410 | $ 492,655 | $ 473,133 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) | Sep. 30, 2022 | Dec. 31, 2021 |
Class B common stock | ||
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | ||
Ratio for converting shares of Class B common stock into shares of Class A common stock | 2,400 | 2,400 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Class A common stock | ||||
Income available to stockholders (Basic EPS:) | ||||
Allocated net income (numerator) | $ 83,623 | $ 89,484 | $ 231,171 | $ 240,830 |
Weighted shares (denominator) (in shares) | 46,189,025 | 46,189,035 | 46,188,878 | 46,188,729 |
Per-share amount (in dollars per share) | $ 1.81 | $ 1.94 | $ 5 | $ 5.21 |
Dilutive effect of stock-based awards | ||||
Allocated net income (numerator) | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted shares (denominator) (in shares) | 6,586 | 15,410 | 8,007 | 18,330 |
Assumed conversion of Class B shares | ||||
Allocated net income (numerator) | $ 690 | $ 739 | $ 1,908 | $ 1,988 |
Weighted shares (denominator) (in shares) | 6,100,800 | 6,100,800 | 6,100,800 | 6,100,800 |
Income available to stockholders on equivalent shares (Diluted EPS:) | ||||
Allocated net income (numerator) | $ 84,313 | $ 90,223 | $ 233,079 | $ 242,818 |
Weighted shares (denominator) (in shares) | 52,296,411 | 52,305,245 | 52,297,685 | 52,307,859 |
Per-share amount (in dollars per share) | $ 1.61 | $ 1.72 | $ 4.46 | $ 4.64 |
Class B common stock | ||||
Income available to stockholders (Basic EPS:) | ||||
Allocated net income (numerator) | $ 690 | $ 739 | $ 1,908 | $ 1,988 |
Weighted shares (denominator) (in shares) | 2,542 | 2,542 | 2,542 | 2,542 |
Per-share amount (in dollars per share) | $ 272 | $ 291 | $ 751 | $ 782 |
Income available to stockholders on equivalent shares (Diluted EPS:) | ||||
Allocated net income (numerator) | $ 690 | $ 739 | $ 1,908 | $ 1,988 |
Weighted shares (denominator) (in shares) | 2,542 | 2,542 | 2,542 | 2,542 |
Per-share amount (in dollars per share) | $ 272 | $ 291 | $ 751 | $ 782 |
Fair Value - Fair Value Measure
Fair Value - Fair Value Measurements on a Recurring Basis by Asset Class and Level of Input (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | $ 874,687 | |
Available-for-sale securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 874,687 | $ 946,085 |
Corporate debt securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 547,193 | 573,165 |
Collateralized debt obligations | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 100,671 | 115,462 |
Commercial mortgage-backed securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 63,217 | 89,324 |
Residential mortgage-backed securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 128,546 | 139,922 |
Other debt securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 22,855 | 23,920 |
U.S. Treasury | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 12,205 | 4,292 |
Fair Value, Measurements, Recurring Basis | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total | 943,656 | 1,033,828 |
Fair Value, Measurements, Recurring Basis | Available-for-sale securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 874,687 | 946,085 |
Fair Value, Measurements, Recurring Basis | Corporate debt securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 547,193 | 573,165 |
Fair Value, Measurements, Recurring Basis | Collateralized debt obligations | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 100,671 | 115,462 |
Fair Value, Measurements, Recurring Basis | Commercial mortgage-backed securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 63,217 | 89,324 |
Fair Value, Measurements, Recurring Basis | Residential mortgage-backed securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 128,546 | 139,922 |
Fair Value, Measurements, Recurring Basis | Other debt securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 22,855 | 23,920 |
Fair Value, Measurements, Recurring Basis | U.S. Treasury | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 12,205 | 4,292 |
Fair Value, Measurements, Recurring Basis | Equity securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 68,969 | 87,743 |
Fair Value, Measurements, Recurring Basis | Equity securities | Financial services sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 57,595 | 71,722 |
Fair Value, Measurements, Recurring Basis | Equity securities | Utilities sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 6,072 | 6,259 |
Fair Value, Measurements, Recurring Basis | Equity securities | Energy sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 3,513 | 6,448 |
Fair Value, Measurements, Recurring Basis | Equity securities | Consumer sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 1,418 | 3,314 |
Fair Value, Measurements, Recurring Basis | Equity securities | Communications sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 371 | |
Fair Value, Measurements, Recurring Basis | Level 1 | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total | 0 | 1,634 |
Fair Value, Measurements, Recurring Basis | Level 1 | Available-for-sale securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 1 | Corporate debt securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 1 | Collateralized debt obligations | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 1 | Commercial mortgage-backed securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 1 | Residential mortgage-backed securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 1 | Other debt securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 1 | U.S. Treasury | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 1 | Equity securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 0 | 1,634 |
Fair Value, Measurements, Recurring Basis | Level 1 | Equity securities | Financial services sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 0 | 1,624 |
Fair Value, Measurements, Recurring Basis | Level 1 | Equity securities | Utilities sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 1 | Equity securities | Energy sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 0 | 10 |
Fair Value, Measurements, Recurring Basis | Level 1 | Equity securities | Consumer sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 1 | Equity securities | Communications sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 0 | |
Fair Value, Measurements, Recurring Basis | Level 2 | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total | 925,504 | 1,000,313 |
Fair Value, Measurements, Recurring Basis | Level 2 | Available-for-sale securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 858,383 | 916,287 |
Fair Value, Measurements, Recurring Basis | Level 2 | Corporate debt securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 539,918 | 567,909 |
Fair Value, Measurements, Recurring Basis | Level 2 | Collateralized debt obligations | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 100,671 | 115,462 |
Fair Value, Measurements, Recurring Basis | Level 2 | Commercial mortgage-backed securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 57,850 | 73,596 |
Fair Value, Measurements, Recurring Basis | Level 2 | Residential mortgage-backed securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 124,884 | 131,108 |
Fair Value, Measurements, Recurring Basis | Level 2 | Other debt securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 22,855 | 23,920 |
Fair Value, Measurements, Recurring Basis | Level 2 | U.S. Treasury | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 12,205 | 4,292 |
Fair Value, Measurements, Recurring Basis | Level 2 | Equity securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 67,121 | 84,026 |
Fair Value, Measurements, Recurring Basis | Level 2 | Equity securities | Financial services sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 55,747 | 68,015 |
Fair Value, Measurements, Recurring Basis | Level 2 | Equity securities | Utilities sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 6,072 | 6,259 |
Fair Value, Measurements, Recurring Basis | Level 2 | Equity securities | Energy sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 3,513 | 6,438 |
Fair Value, Measurements, Recurring Basis | Level 2 | Equity securities | Consumer sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 1,418 | 3,314 |
Fair Value, Measurements, Recurring Basis | Level 2 | Equity securities | Communications sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 371 | |
Fair Value, Measurements, Recurring Basis | Level 3 | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total | 18,152 | 31,881 |
Fair Value, Measurements, Recurring Basis | Level 3 | Available-for-sale securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 16,304 | 29,798 |
Fair Value, Measurements, Recurring Basis | Level 3 | Corporate debt securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 7,275 | 5,256 |
Fair Value, Measurements, Recurring Basis | Level 3 | Collateralized debt obligations | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 3 | Commercial mortgage-backed securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 5,367 | 15,728 |
Fair Value, Measurements, Recurring Basis | Level 3 | Residential mortgage-backed securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 3,662 | 8,814 |
Fair Value, Measurements, Recurring Basis | Level 3 | Other debt securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 3 | U.S. Treasury | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 3 | Equity securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 1,848 | 2,083 |
Fair Value, Measurements, Recurring Basis | Level 3 | Equity securities | Financial services sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 1,848 | 2,083 |
Fair Value, Measurements, Recurring Basis | Level 3 | Equity securities | Utilities sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 3 | Equity securities | Energy sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 3 | Equity securities | Consumer sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 0 | $ 0 |
Fair Value, Measurements, Recurring Basis | Level 3 | Equity securities | Communications sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | $ 0 |
Fair Value - Level 3 Assets (De
Fair Value - Level 3 Assets (Details) - Level 3 - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Roll forward of level 3 fair value measurements on a recurring basis | ||||
Beginning balance | $ 59,395 | $ 30,546 | $ 31,881 | $ 26,224 |
Included in earnings | (880) | (75) | (1,772) | (253) |
Included in other comprehensive income | (2,149) | (165) | (3,530) | (535) |
Purchases | 753 | 2,224 | 10,574 | 11,664 |
Sales | (7,781) | (5,248) | (16,911) | (7,405) |
Transfers into Level 3 | 4,747 | 6,510 | 52,396 | 17,033 |
Transfers out of Level 3 | (35,933) | (11,053) | (54,486) | (23,989) |
Ending balance | 18,152 | 22,739 | 18,152 | 22,739 |
Available-for-sale securities | ||||
Roll forward of level 3 fair value measurements on a recurring basis | ||||
Beginning balance | 57,529 | 29,546 | 29,798 | 26,224 |
Included in earnings | (862) | (88) | (1,537) | (271) |
Included in other comprehensive income | (2,149) | (165) | (3,530) | (535) |
Purchases | 753 | 2,224 | 10,574 | 10,664 |
Sales | (7,781) | (5,248) | (16,911) | (7,405) |
Transfers into Level 3 | 4,747 | 5,417 | 52,396 | 14,850 |
Transfers out of Level 3 | (35,933) | (11,053) | (54,486) | (22,894) |
Ending balance | 16,304 | 20,633 | 16,304 | 20,633 |
Corporate debt securities | Available-for-sale securities | ||||
Roll forward of level 3 fair value measurements on a recurring basis | ||||
Beginning balance | 6,109 | 6,078 | 5,256 | 5,825 |
Included in earnings | (7) | 7 | (2) | 27 |
Included in other comprehensive income | (28) | 3 | (417) | 82 |
Purchases | 753 | 1,995 | 5,687 | 4,253 |
Sales | (495) | (1,213) | (3,614) | (1,886) |
Transfers into Level 3 | 2,899 | 1,129 | 8,673 | 3,678 |
Transfers out of Level 3 | (1,956) | (1,802) | (8,308) | (5,782) |
Ending balance | 7,275 | 6,197 | 7,275 | 6,197 |
Collateralized debt obligations | Available-for-sale securities | ||||
Roll forward of level 3 fair value measurements on a recurring basis | ||||
Beginning balance | 750 | 0 | ||
Included in earnings | 0 | 0 | ||
Included in other comprehensive income | 0 | 0 | ||
Purchases | 0 | 750 | ||
Sales | 0 | 0 | ||
Transfers into Level 3 | 0 | 0 | ||
Transfers out of Level 3 | (750) | (750) | ||
Ending balance | 0 | 0 | ||
Commercial mortgage-backed securities | Available-for-sale securities | ||||
Roll forward of level 3 fair value measurements on a recurring basis | ||||
Beginning balance | 8,871 | 17,133 | 15,728 | 19,462 |
Included in earnings | (188) | (90) | (892) | (287) |
Included in other comprehensive income | (413) | (143) | (1,071) | (590) |
Purchases | 0 | 229 | 0 | 3,073 |
Sales | (660) | (2,912) | (3,825) | (3,878) |
Transfers into Level 3 | 1,174 | 0 | 5,509 | 3,854 |
Transfers out of Level 3 | (3,417) | (4,523) | (10,082) | (11,940) |
Ending balance | 5,367 | 9,694 | 5,367 | 9,694 |
Residential mortgage-backed securities | Available-for-sale securities | ||||
Roll forward of level 3 fair value measurements on a recurring basis | ||||
Beginning balance | 42,549 | 3,041 | 8,814 | 937 |
Included in earnings | (667) | (5) | (643) | (11) |
Included in other comprehensive income | (1,708) | (26) | (2,042) | (26) |
Purchases | 0 | 0 | 4,887 | 0 |
Sales | (6,626) | (366) | (9,472) | (842) |
Transfers into Level 3 | 674 | 4,288 | 38,214 | 7,318 |
Transfers out of Level 3 | (30,560) | (2,644) | (36,096) | (3,088) |
Ending balance | 3,662 | 4,288 | 3,662 | 4,288 |
Other debt securities | Available-for-sale securities | ||||
Roll forward of level 3 fair value measurements on a recurring basis | ||||
Beginning balance | 2,544 | 0 | ||
Included in earnings | 0 | 0 | ||
Included in other comprehensive income | 1 | (1) | ||
Purchases | 0 | 2,588 | ||
Sales | (757) | (799) | ||
Transfers into Level 3 | 0 | 0 | ||
Transfers out of Level 3 | (1,334) | (1,334) | ||
Ending balance | 454 | 454 | ||
Equity securities | Equity securities | ||||
Roll forward of level 3 fair value measurements on a recurring basis | ||||
Beginning balance | 1,866 | 1,000 | 2,083 | 0 |
Included in earnings | (18) | 13 | (235) | 18 |
Included in other comprehensive income | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 1,000 |
Sales | 0 | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 1,093 | 0 | 2,183 |
Transfers out of Level 3 | 0 | 0 | 0 | (1,095) |
Ending balance | $ 1,848 | $ 2,106 | $ 1,848 | $ 2,106 |
Fair Value - Financial Instrume
Fair Value - Financial Instruments Not Carried at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Carrying value | ||
Carrying value and fair value measurements of financial instruments not carried at fair value | ||
Agent loans | $ 69,425 | $ 66,368 |
Long-term borrowings | 0 | 94,070 |
Level 3 | Fair value | ||
Carrying value and fair value measurements of financial instruments not carried at fair value | ||
Agent loans | 57,457 | 68,957 |
Long-term borrowings | $ 0 | $ 103,981 |
Investments - Cost and Fair Val
Investments - Cost and Fair Value, Net of Credit Loss Allowance, of Available-For-Sale Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Available-for-sale securities | ||
Amortized cost | $ 954,297 | |
Estimated fair value | 874,687 | |
Corporate debt securities | ||
Available-for-sale securities | ||
Amortized cost | 591,682 | $ 565,997 |
Gross unrealized gains | 186 | 9,663 |
Gross unrealized losses | 44,675 | 2,495 |
Estimated fair value | 547,193 | 573,165 |
Collateralized debt obligations | ||
Available-for-sale securities | ||
Amortized cost | 105,938 | 115,344 |
Gross unrealized gains | 6 | 456 |
Gross unrealized losses | 5,273 | 338 |
Estimated fair value | 100,671 | 115,462 |
Commercial mortgage-backed securities | ||
Available-for-sale securities | ||
Amortized cost | 71,032 | 88,636 |
Gross unrealized gains | 0 | 1,465 |
Gross unrealized losses | 7,815 | 777 |
Estimated fair value | 63,217 | 89,324 |
Residential mortgage-backed securities | ||
Available-for-sale securities | ||
Amortized cost | 147,276 | 140,217 |
Gross unrealized gains | 1 | 1,007 |
Gross unrealized losses | 18,731 | 1,302 |
Estimated fair value | 128,546 | 139,922 |
Other debt securities | ||
Available-for-sale securities | ||
Amortized cost | 25,103 | 23,859 |
Gross unrealized gains | 0 | 197 |
Gross unrealized losses | 2,248 | 136 |
Estimated fair value | 22,855 | 23,920 |
U.S. Treasury | ||
Available-for-sale securities | ||
Amortized cost | 13,266 | 4,226 |
Gross unrealized gains | 0 | 73 |
Gross unrealized losses | 1,061 | 7 |
Estimated fair value | 12,205 | 4,292 |
Available-for-sale securities | ||
Available-for-sale securities | ||
Amortized cost | 954,297 | 938,279 |
Gross unrealized gains | 193 | 12,861 |
Gross unrealized losses | 79,803 | 5,055 |
Estimated fair value | $ 874,687 | $ 946,085 |
Investments - Amortized Cost an
Investments - Amortized Cost and Estimated Fair Value, Net of Credit Loss Allowance, of Available-For-Sale Securities by Contractual Maturity (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Amortized cost | |
Due in one year or less | $ 25,891 |
Due after one year through five years | 424,086 |
Due after five years through ten years | 217,387 |
Due after ten years | 286,933 |
Amortized cost | 954,297 |
Estimated fair value | |
Due in one year or less | 25,558 |
Due after one year through five years | 396,166 |
Due after five years through ten years | 200,110 |
Due after ten years | 252,853 |
Estimated fair value | $ 874,687 |
Investments - Schedule of Avail
Investments - Schedule of Available-For-Sale Securities in a Gross Unrealized Loss Position by Length of Time (Details) $ in Thousands | Sep. 30, 2022 USD ($) holding | Dec. 31, 2021 USD ($) holding |
Investment grade | ||
Fair value | ||
Less than 12 months | $ 649,184 | $ 330,697 |
12 months or longer | 106,235 | 17,112 |
Total | 755,419 | 347,809 |
Unrealized losses | ||
Less than 12 months | 51,725 | 3,801 |
12 months or longer | 14,782 | 434 |
Total | $ 66,507 | $ 4,235 |
No. of holdings | holding | 770 | 366 |
Non-investment grade | ||
Fair value | ||
Less than 12 months | $ 100,984 | $ 45,279 |
12 months or longer | 9,057 | 6,110 |
Total | 110,041 | 51,389 |
Unrealized losses | ||
Less than 12 months | 11,557 | 405 |
12 months or longer | 1,739 | 415 |
Total | $ 13,296 | $ 820 |
No. of holdings | holding | 747 | 363 |
Corporate debt securities | ||
Fair value | ||
Less than 12 months | $ 488,178 | $ 179,281 |
12 months or longer | 52,867 | 12,494 |
Total | 541,045 | 191,775 |
Unrealized losses | ||
Less than 12 months | 37,243 | 1,912 |
12 months or longer | 7,432 | 583 |
Total | $ 44,675 | $ 2,495 |
No. of holdings | holding | 1,030 | 441 |
Collateralized debt obligations | ||
Fair value | ||
Less than 12 months | $ 67,482 | $ 64,270 |
12 months or longer | 31,984 | 9,370 |
Total | 99,466 | 73,640 |
Unrealized losses | ||
Less than 12 months | 3,368 | 278 |
12 months or longer | 1,905 | 60 |
Total | $ 5,273 | $ 338 |
No. of holdings | holding | 159 | 104 |
Commercial mortgage-backed securities | ||
Fair value | ||
Less than 12 months | $ 56,265 | $ 28,001 |
12 months or longer | 6,174 | 917 |
Total | 62,439 | 28,918 |
Unrealized losses | ||
Less than 12 months | 6,480 | 595 |
12 months or longer | 1,335 | 182 |
Total | $ 7,815 | $ 777 |
No. of holdings | holding | 123 | 61 |
Residential mortgage-backed securities | ||
Fair value | ||
Less than 12 months | $ 104,610 | $ 89,460 |
12 months or longer | 23,145 | 441 |
Total | 127,755 | 89,901 |
Unrealized losses | ||
Less than 12 months | 13,096 | 1,278 |
12 months or longer | 5,635 | 24 |
Total | $ 18,731 | $ 1,302 |
No. of holdings | holding | 157 | 98 |
Other debt securities | ||
Fair value | ||
Less than 12 months | $ 21,428 | $ 14,576 |
12 months or longer | 1,122 | 0 |
Total | 22,550 | 14,576 |
Unrealized losses | ||
Less than 12 months | 2,034 | 136 |
12 months or longer | 214 | 0 |
Total | $ 2,248 | $ 136 |
No. of holdings | holding | 45 | 24 |
U.S. Treasury | ||
Fair value | ||
Less than 12 months | $ 12,205 | $ 388 |
12 months or longer | 0 | 0 |
Total | 12,205 | 388 |
Unrealized losses | ||
Less than 12 months | 1,061 | 7 |
12 months or longer | 0 | 0 |
Total | $ 1,061 | $ 7 |
No. of holdings | holding | 3 | 1 |
Available-for-sale securities | ||
Fair value | ||
Less than 12 months | $ 750,168 | $ 375,976 |
12 months or longer | 115,292 | 23,222 |
Total | 865,460 | 399,198 |
Unrealized losses | ||
Less than 12 months | 63,282 | 4,206 |
12 months or longer | 16,521 | 849 |
Total | $ 79,803 | $ 5,055 |
No. of holdings | holding | 1,517 | 729 |
Investments - Credit Loss Allow
Investments - Credit Loss Allowance on Investments (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Investments [Abstract] | ||
Agent loans, allowance for credit loss | $ 1 | $ 1 |
Available-for-sale securities, allowance for credit loss | $ 0.1 | $ 0.1 |
Investments - Schedule of Inves
Investments - Schedule of Investment Income (Loss), Net of Expenses, from Portfolios (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Investment income (loss) from portfolios | ||||
Limited partnerships | $ (4,643) | $ 11,504 | $ (2,158) | $ 26,701 |
Total investment income | 6,133 | 19,182 | 25,604 | 50,596 |
Less: investment expenses | 299 | 324 | 998 | 991 |
Net investment income | 5,834 | 18,858 | 24,606 | 49,605 |
Available-for-sale securities | ||||
Investment income (loss) from portfolios | ||||
Available-for-sale, equity securities, cash equivalents, and other | 8,546 | 5,786 | 21,919 | 17,773 |
Equity securities | ||||
Investment income (loss) from portfolios | ||||
Available-for-sale, equity securities, cash equivalents, and other | 979 | 1,030 | 2,942 | 3,348 |
Cash equivalents and other | ||||
Investment income (loss) from portfolios | ||||
Available-for-sale, equity securities, cash equivalents, and other | $ 1,251 | $ 862 | $ 2,901 | $ 2,774 |
Investments - Realized and Unre
Investments - Realized and Unrealized Investment Gains (Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Available-for-sale securities: | ||||
Gross realized gains | $ 146 | $ 2,424 | $ 1,055 | $ 5,422 |
Gross realized losses | (4,752) | (235) | (10,163) | (1,353) |
Net realized (losses) gains on available-for-sale securities | (4,606) | 2,189 | (9,108) | 4,069 |
Equity securities: | ||||
Equity securities | (1,624) | (579) | (14,727) | 1,113 |
Miscellaneous: | ||||
Miscellaneous | 0 | 0 | 2 | 1 |
Net realized and unrealized investment (losses) gains | $ (6,230) | $ 1,610 | $ (23,833) | $ 5,183 |
Investments - Portion of Net Un
Investments - Portion of Net Unrealized Gains and Losses Recognized During the Reporting Period Related To Equity Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Equity securities: | ||||
Net (losses) gains recognized during the period | $ (1,624) | $ (579) | $ (14,727) | $ 1,113 |
Less: net gains (losses) recognized on securities sold | 243 | (267) | (1,327) | 5 |
Net unrealized (losses) gains recognized on securities held at reporting date | $ (1,867) | $ (312) | $ (13,400) | $ 1,108 |
Investments - Impairments on Av
Investments - Impairments on Available-For-Sale Securities and Agent Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Available-for-sale securities: | ||||
Intent to sell | $ (45) | $ (10) | $ (146) | $ (10) |
Credit (impaired) recovered | (130) | (13) | (283) | 73 |
Total available-for-sale securities | (175) | (23) | (429) | 63 |
Agent loans - expected credit recoveries | 0 | 153 | 0 | 153 |
Net impairment (losses) recoveries recognized in earnings | $ (175) | $ 130 | $ (429) | $ 216 |
Borrowing Arrangements - Term L
Borrowing Arrangements - Term Loan Credit Facility (Details) - Secured debt - USD ($) | 1 Months Ended | |||
May 18, 2022 | Jan. 01, 2019 | May 31, 2022 | Dec. 31, 2016 | |
Term loan credit facility | ||||
Amount of senior secured draw term loan credit facility | $ 100,000,000 | |||
Fixed interest rate of credit facility (as a percent) | 4.35% | |||
Repayment period of credit facility | 28 years | |||
Extinguishment of debt | $ 93,200,000 | |||
Interest Expense | ||||
Term loan credit facility | ||||
Amortization of debt issuance costs | $ 200,000 |
Borrowing Arrangements - Bank L
Borrowing Arrangements - Bank Line of Credit (Details) - Revolving line of credit - USD ($) $ in Millions | Sep. 30, 2022 | Oct. 31, 2021 |
Bank line of credit | ||
Maximum borrowing capacity under the bank revolving line of credit | $ 100 | |
Maximum letter of credit sublimit under the bank revolving line of credit | $ 25 | |
Available borrowing capacity under the bank revolving line of credit, due to outstanding letters of credit | $ 99.1 | |
Outstanding amount of letters of credit under the bank revolving line of credit | 0.9 | |
Available amount of letters of credit under the bank revolving line of credit | 24.1 | |
Fair value of investments pledged as collateral on the bank revolving line of credit | $ 108.7 |
Postretirement Benefits (Detail
Postretirement Benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Postretirement Benefits | ||||
Funding target (as a percentage of the funding target liability) | 100% | 100% | ||
Defined benefit plan, plan assets, contributions by employer | $ 25,000 | |||
Cost of pension plans: | ||||
Service cost for benefits earned | 12,560 | $ 13,260 | $ 37,681 | $ 39,780 |
Interest cost on benefits obligation | 9,941 | 9,206 | 29,823 | 27,618 |
Expected return on plan assets | (13,639) | (12,569) | (40,917) | (37,706) |
Prior service cost amortization | 361 | 357 | 1,082 | 1,071 |
Net actuarial loss amortization | 1,830 | 4,027 | 5,490 | 12,080 |
Pension plan cost | $ 11,053 | $ 14,281 | $ 33,159 | $ 42,843 |
Erie Insurance Exchange | ||||
Postretirement Benefits | ||||
Postretirement annual benefit expense reimbursed to Indemnity from the Exchange and its subsidiaries (as a percent) | 57% |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate (as a percent) | 20.70% | 20.90% | 20.90% | 20.80% |
Capital Stock - Class A and B C
Capital Stock - Class A and B Common Stock (Details) - Class B common stock | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 shares | Dec. 31, 2021 shares | |
Common Stock | ||
Ratio for converting shares of Class B common stock into shares of Class A common stock | 2,400 | 2,400 |
Class B common stock shares converted into Class A common stock shares (in shares) | 0 | 0 |
Capital Stock - Stock Repurchas
Capital Stock - Stock Repurchases (Details) - Class A common stock - Stock repurchase program - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2011 | |
Stock repurchases | |||
Amount of authorized stock repurchases approved for continuation under the current program | $ 150 | ||
Shares repurchased under stock repurchase program (in shares) | 0 | 0 | |
Approximate amount of repurchase authority remaining under the current stock repurchase program | $ 17.8 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Accumulated other comprehensive income (loss), net of tax | ||||||||
AOCI (loss), beginning of period | $ (25,288) | $ (25,288) | ||||||
Change in unrealized holding losses on available-for-sale securities | $ (17,178) | $ (3,732) | (69,082) | $ (9,808) | ||||
Pension and other postretirement plans, OCI | 1,731 | 3,463 | 5,198 | 10,389 | ||||
Other comprehensive (loss) income | (15,447) | $ (23,248) | (25,189) | (269) | $ 6,139 | $ (5,289) | (63,884) | 581 |
AOCI (loss), end of period | (89,172) | (89,172) | ||||||
Investment securities: | ||||||||
Accumulated other comprehensive income (loss), before tax | ||||||||
AOCI (loss), beginning of period | (57,980) | 7,722 | 21,693 | 29,384 | 7,722 | 29,384 | ||
OCI (loss) before reclassifications | (26,524) | (2,557) | (96,982) | (8,282) | ||||
Realized investment losses (gains) | 4,606 | (2,189) | 9,108 | (4,069) | ||||
Impairment losses | 175 | 23 | 429 | (63) | ||||
Investment securities, OCI (loss) | (21,743) | (4,723) | (87,445) | (12,414) | ||||
AOCI (loss), end of period | (79,723) | (57,980) | 16,970 | 21,693 | (79,723) | 16,970 | ||
Accumulated other comprehensive income (loss), tax | ||||||||
AOCI (loss), beginning of period | (12,177) | 1,621 | 4,556 | 6,171 | 1,621 | 6,171 | ||
OCI (loss) before reclassifications | (5,570) | (537) | (20,366) | (1,739) | ||||
Realized investment losses (gains) | 968 | (459) | 1,913 | (854) | ||||
Impairment losses | 37 | 5 | 90 | (13) | ||||
Investment securities, OCI (loss) | (4,565) | (991) | (18,363) | (2,606) | ||||
AOCI (loss), end of period | (16,742) | (12,177) | 3,565 | 4,556 | (16,742) | 3,565 | ||
Accumulated other comprehensive income (loss), net of tax | ||||||||
AOCI (loss), beginning of period | (45,803) | 6,101 | 17,137 | 23,213 | 6,101 | 23,213 | ||
OCI (loss) before reclassifications | (20,954) | (2,020) | (76,616) | (6,543) | ||||
Realized investment losses (gains) | 3,638 | (1,730) | 7,195 | (3,215) | ||||
Impairment losses | 138 | 18 | 339 | (50) | ||||
Change in unrealized holding losses on available-for-sale securities | (17,178) | (3,732) | (69,082) | (9,808) | ||||
AOCI (loss), end of period | (62,981) | (45,803) | 13,405 | 17,137 | (62,981) | 13,405 | ||
Pension and other postretirement plans: | ||||||||
Accumulated other comprehensive income (loss), before tax | ||||||||
AOCI (loss), beginning of period | (35,346) | (39,734) | (119,533) | (128,300) | (39,734) | (128,300) | ||
Amortization of prior service costs | 361 | 357 | 1,082 | 1,071 | ||||
Amortization of net actuarial loss | 1,830 | 4,027 | 5,497 | 12,080 | ||||
Pension and other postretirement plans, OCI | 2,191 | 4,384 | 6,579 | 13,151 | ||||
AOCI (loss), end of period | (33,155) | (35,346) | (115,149) | (119,533) | (33,155) | (115,149) | ||
Accumulated other comprehensive income (loss), tax | ||||||||
AOCI (loss), beginning of period | (7,424) | (8,345) | (25,103) | (26,944) | (8,345) | (26,944) | ||
Amortization of prior service costs | 76 | 75 | 227 | 225 | ||||
Amortization of net actuarial loss | 384 | 846 | 1,154 | 2,537 | ||||
Pension and other postretirement plans, OCI | 460 | 921 | 1,381 | 2,762 | ||||
AOCI (loss), end of period | (6,964) | (7,424) | (24,182) | (25,103) | (6,964) | (24,182) | ||
Accumulated other comprehensive income (loss), net of tax | ||||||||
AOCI (loss), beginning of period | (27,922) | (31,389) | (94,430) | (101,356) | (31,389) | (101,356) | ||
Amortization of prior service costs | 285 | 282 | 855 | 846 | ||||
Amortization of net actuarial loss | 1,446 | 3,181 | 4,343 | 9,543 | ||||
Pension and other postretirement plans, OCI | 1,731 | 3,463 | 5,198 | 10,389 | ||||
AOCI (loss), end of period | (26,191) | (27,922) | (90,967) | (94,430) | (26,191) | (90,967) | ||
Total | ||||||||
Accumulated other comprehensive income (loss), before tax | ||||||||
AOCI (loss), beginning of period | (93,326) | (32,012) | (97,840) | (98,916) | (32,012) | (98,916) | ||
Investment securities, OCI (loss) | (21,743) | (4,723) | (87,445) | (12,414) | ||||
Pension and other postretirement plans, OCI | 2,191 | 4,384 | 6,579 | 13,151 | ||||
OCI (loss) | (19,552) | (339) | (80,866) | 737 | ||||
AOCI (loss), end of period | (112,878) | (93,326) | (98,179) | (97,840) | (112,878) | (98,179) | ||
Accumulated other comprehensive income (loss), tax | ||||||||
AOCI (loss), beginning of period | (19,601) | (6,724) | (20,547) | (20,773) | (6,724) | (20,773) | ||
Investment securities, OCI (loss) | (4,565) | (991) | (18,363) | (2,606) | ||||
Pension and other postretirement plans, OCI | 460 | 921 | 1,381 | 2,762 | ||||
OCI (loss) | (4,105) | (70) | (16,982) | 156 | ||||
AOCI (loss), end of period | (23,706) | (19,601) | (20,617) | (20,547) | (23,706) | (20,617) | ||
Accumulated other comprehensive income (loss), net of tax | ||||||||
AOCI (loss), beginning of period | (73,725) | (25,288) | (77,293) | (78,143) | (25,288) | (78,143) | ||
Change in unrealized holding losses on available-for-sale securities | (17,178) | (3,732) | (69,082) | (9,808) | ||||
Pension and other postretirement plans, OCI | 1,731 | 3,463 | 5,198 | 10,389 | ||||
Other comprehensive (loss) income | (15,447) | (23,248) | $ (25,189) | (269) | 6,139 | $ (5,289) | (63,884) | 581 |
AOCI (loss), end of period | $ (89,172) | $ (73,725) | $ (77,562) | $ (77,293) | $ (89,172) | $ (77,562) |
Concentrations of Credit Risk (
Concentrations of Credit Risk (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Risks and Uncertainties [Abstract] | ||
Receivables from Erie Insurance Exchange and affiliates, net | $ 544,353 | $ 479,123 |
Current expected credit loss allowance | $ 500 | $ 500 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Loan Purchase Commitments - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2020 | |
Other Commitments [Line Items] | ||
Minimum funding percentage of each loan | 30% | |
Participation amount in loan program | $ 16.3 | |
Loan program, guaranteed amount | 5.8 | |
Third-Party Bank | ||
Other Commitments [Line Items] | ||
Amount of loan participation program | $ 47.3 | |
Third-Party Bank | Maximum | ||
Other Commitments [Line Items] | ||
Amount of loan participation program | $ 100 |