Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 20, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
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 | 2023 | |
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, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Operating revenue | ||||
Total operating revenue | $ 858,938 | $ 741,236 | $ 2,451,273 | $ 2,139,489 |
Operating expenses | ||||
Total operating expenses | 710,467 | 634,764 | 2,058,101 | 1,844,705 |
Operating income | 148,471 | 106,472 | 393,172 | 294,784 |
Investment income | ||||
Net investment income | 14,642 | 5,834 | 30,360 | 24,606 |
Net realized and unrealized investment losses | (2,227) | (6,230) | (9,246) | (23,833) |
Net impairment losses recognized in earnings | (113) | (175) | (1,917) | (429) |
Total investment income (loss) | 12,302 | (571) | 19,197 | 344 |
Interest expense | 0 | 115 | 0 | 2,009 |
Other income | 3,001 | 562 | 9,643 | 1,372 |
Income before income taxes | 163,774 | 106,348 | 422,012 | 294,491 |
Income tax expense | 32,734 | 22,035 | 86,879 | 61,412 |
Net income | $ 131,040 | $ 84,313 | $ 335,133 | $ 233,079 |
Class A common stock | ||||
Earnings per share - Basic and diluted: | ||||
Common stock - basic (in dollars per share) | $ 2.81 | $ 1.81 | $ 7.20 | $ 5 |
Common stock - diluted (in dollars per share) | $ 2.51 | $ 1.61 | $ 6.41 | $ 4.46 |
Weighted average shares outstanding – Basic | ||||
Common stock - basic (in shares) | 46,189,037 | 46,189,025 | 46,188,962 | 46,188,878 |
Weighted average shares outstanding – Diluted | ||||
Common stock - diluted (in shares) | 52,299,369 | 52,296,411 | 52,298,655 | 52,297,685 |
Dividends declared per share | ||||
Dividends declared (in dollars per share) | $ 1.19 | $ 1.11 | $ 3.57 | $ 3.33 |
Class B common stock | ||||
Earnings per share - Basic and diluted: | ||||
Common stock - basic (in dollars per share) | 422 | 272 | 1,079 | 751 |
Common stock - diluted (in dollars per share) | $ 422 | $ 272 | $ 1,079 | $ 751 |
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) | $ 178.50 | $ 166.50 | $ 535.50 | $ 499.50 |
Management fee revenue - policy issuance and renewal services | ||||
Operating revenue | ||||
Total operating revenue | $ 649,049 | $ 551,666 | $ 1,840,478 | $ 1,584,213 |
Operating expenses | ||||
Total operating expenses | 523,349 | 466,111 | 1,513,690 | 1,352,050 |
Management fee revenue - administrative services | ||||
Operating revenue | ||||
Total operating revenue | 16,151 | 14,657 | 46,976 | 43,446 |
Administrative services reimbursement revenue | ||||
Operating revenue | ||||
Total operating revenue | 187,118 | 168,653 | 544,411 | 492,655 |
Operating expenses | ||||
Total operating expenses | 187,118 | 168,653 | 544,411 | 492,655 |
Service agreement revenue | ||||
Operating revenue | ||||
Total operating revenue | $ 6,620 | $ 6,260 | $ 19,408 | $ 19,175 |
STATEMENTS OF COMPREHENSIVE INC
STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 131,040 | $ 84,313 | $ 335,133 | $ 233,079 |
Other comprehensive loss, net of tax | ||||
Change in unrealized holding (losses) gains on available-for-sale securities | (5,902) | (17,178) | 2,846 | (69,082) |
Amortization of prior service costs and net actuarial (gain) loss on pension and other postretirement plans | (2,742) | 1,731 | (8,226) | 5,198 |
Total other comprehensive loss, net of tax | (8,644) | (15,447) | (5,380) | (63,884) |
Comprehensive income | $ 122,396 | $ 68,866 | $ 329,753 | $ 169,195 |
STATEMENTS OF FINANCIAL POSITIO
STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 102,873 | $ 142,090 |
Available-for-sale securities | 69,822 | 24,267 |
Receivables from Erie Insurance Exchange and affiliates, net | 620,683 | 524,937 |
Prepaid expenses and other current assets | 71,480 | 79,201 |
Accrued investment income | 8,968 | 8,301 |
Total current assets | 873,826 | 778,796 |
Available-for-sale securities, net | 845,415 | 870,394 |
Equity securities | 79,516 | 72,560 |
Fixed assets, net | 434,975 | 413,874 |
Agent loans, net | 59,544 | 60,537 |
Defined benefit pension plan | 65,163 | 0 |
Other assets | 36,110 | 43,295 |
Total assets | 2,394,549 | 2,239,456 |
Current liabilities: | ||
Commissions payable | 357,614 | 300,028 |
Agent bonuses | 50,252 | 95,166 |
Accounts payable and accrued liabilities | 165,797 | 165,915 |
Dividends payable | 55,419 | 55,419 |
Contract liability | 40,831 | 36,547 |
Deferred executive compensation | 11,000 | 12,036 |
Total current liabilities | 680,913 | 665,111 |
Defined benefit pension plans | 27,744 | 51,224 |
Contract liability | 19,653 | 17,895 |
Deferred executive compensation | 18,547 | 13,724 |
Deferred income taxes, net | 11,045 | 14,075 |
Other long-term liabilities | 24,758 | 29,019 |
Total liabilities | 782,660 | 791,048 |
Shareholders’ equity | ||
Additional paid-in-capital | 16,466 | 16,481 |
Accumulated other comprehensive loss | (12,794) | (7,414) |
Retained earnings | 2,752,137 | 2,583,261 |
Total contributed capital and retained earnings | 2,757,979 | 2,594,498 |
Treasury stock, at cost; 22,110,132 shares held | (1,168,761) | (1,168,949) |
Deferred compensation | 22,671 | 22,859 |
Total shareholders’ equity | 1,611,889 | 1,448,408 |
Total liabilities and shareholders’ equity | 2,394,549 | 2,239,456 |
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, 2023 $ / shares shares | Dec. 31, 2022 $ / 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) income | Retained earnings | Retained earnings Class A common stock | Retained earnings Class B common stock | Treasury stock | Deferred compensation | |
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 income (loss) | (25,189) | (25,189) | |||||||||||
Dividends declared: | $ (51,270) | $ (423) | $ (51,270) | $ (423) | |||||||||
Net purchase of treasury stock | [1] | (15) | (15) | 0 | |||||||||
Deferred compensation | 0 | (802) | 802 | ||||||||||
Rabbi trust distribution | [2] | 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 income (loss) | (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 income (loss) | (23,248) | (23,248) | |||||||||||
Dividends declared: | (51,270) | (423) | (51,270) | (423) | |||||||||
Net purchase of treasury stock | [1] | 0 | 0 | 0 | |||||||||
Deferred compensation | 0 | (907) | 907 | ||||||||||
Rabbi trust distribution | [2] | 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 income (loss) | (15,447) | (15,447) | |||||||||||
Dividends declared: | (51,270) | (423) | (51,270) | (423) | |||||||||
Net purchase of treasury stock | [1] | 0 | 0 | 0 | |||||||||
Deferred compensation | 0 | (799) | 799 | ||||||||||
Rabbi trust distribution | [2] | 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 | |||||
Beginning balance at Dec. 31, 2022 | 1,448,408 | 1,992 | 178 | 16,481 | (7,414) | 2,583,261 | (1,168,949) | 22,859 | |||||
Increase (decrease) in shareholders' equity | |||||||||||||
Net income | 86,241 | 86,241 | |||||||||||
Other comprehensive income (loss) | 7,752 | 7,752 | |||||||||||
Dividends declared: | (54,965) | (454) | (54,965) | (454) | |||||||||
Net purchase of treasury stock | [3] | (15) | (15) | 0 | |||||||||
Deferred compensation | 0 | (822) | 822 | ||||||||||
Rabbi trust distribution | [4] | 0 | 416 | (416) | |||||||||
Ending balance at Mar. 31, 2023 | 1,486,967 | 1,992 | 178 | 16,466 | 338 | 2,614,083 | (1,169,355) | 23,265 | |||||
Beginning balance at Dec. 31, 2022 | 1,448,408 | 1,992 | 178 | 16,481 | (7,414) | 2,583,261 | (1,168,949) | 22,859 | |||||
Increase (decrease) in shareholders' equity | |||||||||||||
Net income | 335,133 | ||||||||||||
Other comprehensive income (loss) | (5,380) | (5,380) | |||||||||||
Ending balance at Sep. 30, 2023 | 1,611,889 | 1,992 | 178 | 16,466 | (12,794) | 2,752,137 | (1,168,761) | 22,671 | |||||
Beginning balance at Mar. 31, 2023 | 1,486,967 | 1,992 | 178 | 16,466 | 338 | 2,614,083 | (1,169,355) | 23,265 | |||||
Increase (decrease) in shareholders' equity | |||||||||||||
Net income | 117,852 | 117,852 | |||||||||||
Other comprehensive income (loss) | (4,488) | (4,488) | |||||||||||
Dividends declared: | (54,965) | (454) | (54,965) | (454) | |||||||||
Net purchase of treasury stock | [3] | 0 | 0 | 0 | |||||||||
Deferred compensation | 0 | (621) | 621 | ||||||||||
Rabbi trust distribution | [4] | 0 | 1,596 | (1,596) | |||||||||
Ending balance at Jun. 30, 2023 | 1,544,912 | 1,992 | 178 | 16,466 | (4,150) | 2,676,516 | (1,168,380) | 22,290 | |||||
Increase (decrease) in shareholders' equity | |||||||||||||
Net income | 131,040 | 131,040 | |||||||||||
Other comprehensive income (loss) | (8,644) | (8,644) | |||||||||||
Dividends declared: | $ (54,965) | $ (454) | $ (54,965) | $ (454) | |||||||||
Net purchase of treasury stock | [3] | 0 | 0 | 0 | |||||||||
Deferred compensation | 0 | (381) | 381 | ||||||||||
Ending balance at Sep. 30, 2023 | $ 1,611,889 | $ 1,992 | $ 178 | $ 16,466 | $ (12,794) | $ 2,752,137 | $ (1,168,761) | $ 22,671 | |||||
[1]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.[2]Distributions of our Class A shares were made from the rabbi trust to four incentive compensation deferral plan participants in 2022.[3]Net purchases of treasury stock in 2023 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 five incentive compensation deferral plan participants in 2023. |
STATEMENTS OF SHAREHOLDERS' E_2
STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) (Parenthetical) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 participant $ / shares | Jun. 30, 2023 $ / shares | Mar. 31, 2023 $ / shares | Sep. 30, 2022 participant $ / shares | Jun. 30, 2022 $ / shares | Mar. 31, 2022 $ / shares | Sep. 30, 2023 participant $ / shares | Sep. 30, 2022 participant $ / shares | |
Number of incentive compensation deferral plan participants | participant | 5 | 4 | 5 | 4 | ||||
Class A common stock | ||||||||
Dividends declared (in dollars per share) | $ 1.19 | $ 1.19 | $ 1.19 | $ 1.11 | $ 1.11 | $ 1.11 | $ 3.57 | $ 3.33 |
Class B common stock | ||||||||
Dividends declared (in dollars per share) | $ 178.50 | $ 178.50 | $ 178.50 | $ 166.50 | $ 166.50 | $ 166.50 | $ 535.50 | $ 499.50 |
STATEMENTS OF CASH FLOWS (UNAUD
STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities | ||
Management fee received | $ 1,799,681 | $ 1,574,694 |
Administrative services reimbursements received | 538,943 | 487,081 |
Service agreement revenue received | 19,367 | 19,025 |
Net investment income received | 42,579 | 28,901 |
Commissions paid to agents | (889,510) | (771,664) |
Agents bonuses paid | (112,968) | (131,699) |
Salaries and wages paid | (178,176) | (164,726) |
Pension contribution and employee benefits paid | (150,992) | (57,222) |
General operating expenses paid | (226,949) | (187,152) |
Administrative services expenses paid | (540,834) | (497,007) |
Income taxes paid | (68,372) | (59,989) |
Interest paid | 0 | (2,134) |
Net cash provided by operating activities | 232,769 | 238,108 |
Purchase of investments: | ||
Available-for-sale securities | (206,616) | (375,466) |
Equity securities | (26,195) | (12,956) |
Other investments | (7) | (157) |
Proceeds from investments: | ||
Available-for-sale securities sales | 126,361 | 238,732 |
Available-for-sale securities maturities/calls | 55,772 | 111,419 |
Equity securities | 14,919 | 16,679 |
Other investments | 853 | 429 |
Purchase of fixed assets | (72,101) | (50,885) |
Proceeds from disposal of fixed assets | 0 | 265 |
Loans to agents | (5,473) | (9,570) |
Collections on agent loans | 6,757 | 6,513 |
Net cash used in investing activities | (105,730) | (74,997) |
Cash flows from financing activities | ||
Dividends paid to shareholders | (166,256) | (155,079) |
Proceeds from short-term borrowings | 0 | 55,000 |
Payments on short-term borrowings | 0 | (55,000) |
Payments on long-term borrowings | 0 | (94,070) |
Net cash used in financing activities | (166,256) | (249,149) |
Net decrease in cash and cash equivalents | (39,217) | (86,038) |
Cash and cash equivalents, beginning of period | 142,090 | 183,702 |
Cash and cash equivalents, end of period | 102,873 | 97,664 |
Supplemental disclosure of noncash transactions | ||
Liability incurred to purchase fixed assets | 0 | 26,386 |
Operating lease assets obtained in exchange for lease liabilities | $ 7,674 | $ 3,176 |
Nature of Operations
Nature of Operations | 9 Months Ended |
Sep. 30, 2023 | |
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. 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. 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". |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. For further information, refer to the financial statements and footnotes included in our Form 10-K for the year ended December 31, 2022 as filed with the Securities and Exchange Commission on March 1, 2023. 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, 2023 | |
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 ended September 30, 2023, we recognized revenue of $7.7 million and $31.5 million, respectively, that was included in the contract liability balance as of December 31, 2022. During the three and nine months ended September 30, 2022, we recognized revenue of $7.4 million and $30.1 million, respectively, that was included in the contract liability balance as of December 31, 2021. 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 from affiliates 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) 2023 2022 2023 2022 Management fee revenue - policy issuance and renewal services $ 649,049 $ 551,666 $ 1,840,478 $ 1,584,213 Management fee revenue - administrative services 16,151 14,657 46,976 43,446 Administrative services reimbursement revenue 187,118 168,653 544,411 492,655 Total revenue from administrative services $ 203,269 $ 183,310 $ 591,387 $ 536,101 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2023 | |
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 is 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, 2023 2022 (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 $ 129,967 46,189,037 $ 2.81 $ 83,623 46,189,025 $ 1.81 Dilutive effect of stock-based awards 0 9,532 — 0 6,586 — Assumed conversion of Class B shares 1,073 6,100,800 — 690 6,100,800 — Class A – Diluted EPS: Income available to Class A stockholders on Class A equivalent shares $ 131,040 52,299,369 $ 2.51 $ 84,313 52,296,411 $ 1.61 Class B – Basic and diluted EPS: Income available to Class B stockholders $ 1,073 2,542 $ 422 $ 690 2,542 $ 272 Nine months ended September 30, 2023 2022 (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 $ 332,389 46,188,962 $ 7.20 $ 231,171 46,188,878 $ 5.00 Dilutive effect of stock-based awards 0 8,893 — 0 8,007 — Assumed conversion of Class B shares 2,744 6,100,800 — 1,908 6,100,800 — Class A – Diluted EPS: Income available to Class A stockholders on Class A equivalent shares $ 335,133 52,298,655 $ 6.41 $ 233,079 52,297,685 $ 4.46 Class B – Basic and diluted EPS: Income available to Class B stockholders $ 2,744 2,542 $ 1,079 $ 1,908 2,542 $ 751 |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023, 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, 2023 (in thousands) Total Level 1 Level 2 Level 3 Available-for-sale securities: Corporate debt securities $ 566,967 $ 0 $ 562,862 $ 4,105 Collateralized debt obligations 110,488 0 110,488 0 Commercial mortgage-backed securities 72,032 0 64,625 7,407 Residential mortgage-backed securities 150,394 0 150,389 5 Other debt securities 15,356 0 15,356 0 Total available-for-sale securities 915,237 0 903,720 11,517 Equity securities: Financial services sector 65,071 796 60,819 3,456 Utilities sector 7,291 0 7,291 0 Energy sector 4,131 0 4,131 0 Consumer sector 2,288 0 2,288 0 Technology sector 500 0 0 500 Industrial sector 177 0 177 0 Communications sector 58 58 0 0 Total equity securities 79,516 854 74,706 3,956 Total $ 994,753 $ 854 $ 978,426 $ 15,473 December 31, 2022 (in thousands) Total Level 1 Level 2 Level 3 Available-for-sale securities: Corporate debt securities $ 553,382 $ 0 $ 549,696 $ 3,686 Collateralized debt obligations 102,537 0 102,537 0 Commercial mortgage-backed securities 66,054 0 55,144 10,910 Residential mortgage-backed securities 150,415 0 146,231 4,184 Other debt securities 22,273 0 22,273 0 Total available-for-sale securities 894,661 0 875,881 18,780 Equity securities: Financial services sector 61,084 0 57,305 3,779 Utilities sector 5,708 0 5,708 0 Energy sector 3,576 0 3,576 0 Consumer sector 1,854 0 1,854 0 Communications sector 338 0 338 0 Total equity securities 72,560 0 68,781 3,779 Total $ 967,221 $ 0 $ 944,662 $ 22,559 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 – 2023 Quarterly Change: (in thousands) Beginning balance at June 30, 2023 Included in earnings (1) Included Purchases Sales Transfers into Level 3 (2) Transfers out of Level 3 (2) Ending balance at September 30, 2023 Available-for-sale securities: Corporate debt securities $ 5,123 $ 10 $ 123 $ 1,661 $ (511) $ 730 $ (3,031) $ 4,105 Commercial mortgage-backed securities 6,533 (182) (56) 0 (366) 1,478 0 7,407 Residential mortgage- backed securities 12 0 0 0 (7) 0 0 5 Total available-for-sale securities 11,668 (172) 67 1,661 (884) 2,208 (3,031) 11,517 Equity securities 4,730 33 — 1,000 0 0 (1,807) 3,956 Total Level 3 securities $ 16,398 $ (139) $ 67 $ 2,661 $ (884) $ 2,208 $ (4,838) $ 15,473 Level 3 Assets – 2023 Year-to-Date Change: (in thousands) Beginning balance at December 31, 2022 Included in earnings (1) Included Purchases Sales Transfers into Level 3 (2) Transfers out of Level 3 (2) Ending balance at September 30, 2023 Available-for-sale securities: Corporate debt securities $ 3,686 $ (4) $ 245 $ 3,193 $ (1,256) $ 3,883 $ (5,642) $ 4,105 Commercial mortgage-backed securities 10,910 (542) 44 1,455 (551) 1,944 (5,853) 7,407 Residential mortgage- backed securities 4,184 (5) 96 0 (115) 33 (4,188) 5 Total available-for-sale securities 18,780 (551) 385 4,648 (1,922) 5,860 (15,683) 11,517 Equity securities 3,779 26 — 1,958 0 0 (1,807) 3,956 Total Level 3 securities $ 22,559 $ (525) $ 385 $ 6,606 $ (1,922) $ 5,860 $ (17,490) $ 15,473 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 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 1,848 Total Level 3 securities $ 31,881 $ (1,772) $ (3,530) $ 10,574 $ (16,911) $ 52,396 $ (54,486) $ 18,152 (1) These amounts are reported as net investment income and net realized and unrealized investment gains (losses) 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, 2023 December 31, 2022 (in thousands) Carrying value Fair value Carrying value Fair value Agent loans $ 68,192 $ 58,955 $ 69,476 $ 62,954 |
Investments
Investments | 9 Months Ended |
Sep. 30, 2023 | |
Investments [Abstract] | |
Investments | Investments Available-for-sale securities See Note 5, "Fair Value" for additional fair value disclosures. The following tables summarize the amortized cost and estimated fair value, net of credit loss allowance, of our available-for-sale securities as of: September 30, 2023 (in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair Corporate debt securities $ 596,538 $ 776 $ 30,347 $ 566,967 Collateralized debt obligations 113,252 64 2,828 110,488 Commercial mortgage-backed securities 78,491 90 6,549 72,032 Residential mortgage-backed securities 173,529 11 23,146 150,394 Other debt securities 16,298 0 942 15,356 Total available-for-sale securities, net $ 978,108 $ 941 $ 63,812 $ 915,237 December 31, 2022 (in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair Corporate debt securities $ 588,536 $ 657 $ 35,811 $ 553,382 Collateralized debt obligations 107,730 11 5,204 102,537 Commercial mortgage-backed securities 73,855 157 7,958 66,054 Residential mortgage-backed securities 166,412 72 16,069 150,415 Other debt securities 24,602 0 2,329 22,273 Total available-for-sale securities, net $ 961,135 $ 897 $ 67,371 $ 894,661 The amortized cost and estimated fair value of available-for-sale securities at September 30, 2023 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, 2023 Amortized Estimated (in thousands) cost fair value Due in one year or less $ 63,056 $ 61,957 Due after one year through five years 431,382 409,557 Due after five years through ten years 171,654 164,848 Due after ten years 312,016 278,875 Total available-for-sale securities, net (1) $ 978,108 $ 915,237 (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, 2023. 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, 2023 Less than 12 months 12 months or longer Total (dollars in thousands) Fair Unrealized Fair Unrealized Fair Unrealized No. of Corporate debt securities $ 173,565 $ 4,529 $ 345,584 $ 25,818 $ 519,149 $ 30,347 832 Collateralized debt obligations 7,010 39 93,940 2,789 100,950 2,828 154 Commercial mortgage-backed securities 33,208 1,064 30,692 5,485 63,900 6,549 156 Residential mortgage-backed securities 48,919 3,118 97,676 20,028 146,595 23,146 182 Other debt securities 7,605 121 7,752 821 15,357 942 39 Total available-for-sale securities $ 270,307 $ 8,871 $ 575,644 $ 54,941 $ 845,951 $ 63,812 1,363 Quality breakdown of available-for-sale securities: Investment grade $ 241,402 $ 8,142 $ 523,719 $ 48,245 $ 765,121 $ 56,387 814 Non-investment grade 28,905 729 51,925 6,696 80,830 7,425 549 Total available-for-sale securities $ 270,307 $ 8,871 $ 575,644 $ 54,941 $ 845,951 $ 63,812 1,363 December 31, 2022 Less than 12 months 12 months or longer Total (dollars in thousands) Fair Unrealized Fair Unrealized Fair Unrealized No. of Corporate debt securities $ 397,511 $ 21,371 $ 121,094 $ 14,440 $ 518,605 $ 35,811 916 Collateralized debt obligations 44,823 2,529 55,335 2,675 100,158 5,204 159 Commercial mortgage-backed securities 41,139 5,124 15,864 2,834 57,003 7,958 131 Residential mortgage-backed securities 109,499 9,131 31,465 6,938 140,964 16,069 161 Other debt securities 15,682 1,323 6,591 1,006 22,273 2,329 46 Total available-for-sale securities $ 608,654 $ 39,478 $ 230,349 $ 27,893 $ 839,003 $ 67,371 1,413 Quality breakdown of available-for-sale securities: Investment grade $ 525,805 $ 31,904 $ 215,742 $ 25,205 $ 741,547 $ 57,109 761 Non-investment grade 82,849 7,574 14,607 2,688 97,456 10,262 652 Total available-for-sale securities $ 608,654 $ 39,478 $ 230,349 $ 27,893 $ 839,003 $ 67,371 1,413 Credit loss allowance on investments The current expected credit loss allowance on agent loans was $1.0 million at both September 30, 2023 and December 31, 2022. The current expected credit loss allowance on available-for-sale securities was $0.4 million at September 30, 2023 and $0.2 million at December 31, 2022. 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) 2023 2022 2023 2022 Available-for-sale securities $ 11,037 $ 8,546 $ 31,404 $ 21,919 Equity securities 1,161 979 3,260 2,942 Limited partnerships (1) (13) (4,643) (10,725) (2,158) Cash equivalents and other 2,687 1,251 6,714 2,901 Total investment income 14,872 6,133 30,653 25,604 Less: investment expenses 230 299 293 998 Net investment income $ 14,642 $ 5,834 $ 30,360 $ 24,606 (1) Limited partnership losses include 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. Net realized and unrealized investment losses Realized and unrealized gains (losses) on investments were as follows: Three months ended September 30, Nine months ended September 30, (in thousands) 2023 2022 2023 2022 Available-for-sale securities: Gross realized gains $ 213 $ 146 $ 519 $ 1,055 Gross realized losses (2,693) (4,752) (6,714) (10,163) Net realized losses on available-for-sale securities (2,480) (4,606) (6,195) (9,108) Equity securities 244 (1,624) (3,060) (14,727) Miscellaneous 9 0 9 2 Net realized and unrealized investment losses $ (2,227) $ (6,230) $ (9,246) $ (23,833) The portion of net unrealized gains (losses) 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) 2023 2022 2023 2022 Equity securities: Net gains (losses) recognized during the period $ 244 $ (1,624) $ (3,060) $ (14,727) Less: net gains (losses) recognized on securities sold 91 243 (2,636) (1,327) Net unrealized gains (losses) recognized on securities held at reporting date $ 153 $ (1,867) $ (424) $ (13,400) Net impairment losses recognized in earnings Impairments on available-for-sale securities were as follows: Three months ended September 30, Nine months ended September 30, (in thousands) 2023 2022 2023 2022 Available-for-sale securities: Intent to sell $ (58) $ (45) $ (1,639) $ (146) Credit (55) (130) (278) (283) Net impairment losses recognized in earnings $ (113) $ (175) $ (1,917) $ (429) |
Bank Line of Credit
Bank Line of Credit | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Bank Line of Credit | Bank Line of Credit We have access to a $100 million bank revolving line of credit with a $25 million letter of credit sublimit that expires on October 29, 2026. As of September 30, 2023, a total of $99.1 million remains available under the facility due to $0.9 million outstanding letters of credit, which reduce the availability for letters of credit to $24.1 million. We had no borrowings outstanding on our line of credit as of September 30, 2023. Investments with a fair value of $114.2 million were pledged as collateral on the line of credit at September 30, 2023. 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, 2023. The bank requires compliance with certain covenants, which include leverage ratios and debt restrictions. We are in compliance with all covenants at September 30, 2023. |
Postretirement Benefits
Postretirement Benefits | 9 Months Ended |
Sep. 30, 2023 | |
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 ("SERP") 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, or are reimbursed for, their allocated share of pension cost or income, respectively. These reimbursements represent pension benefits for employees performing administrative services and an allocated share of plan (income) cost for employees in departments that support the administrative functions. As of September 30, 2023, approximately 60% of the annual defined benefit pension income and 36% of the annual SERP cost was reimbursed to and from, respectively, the Exchange and its subsidiaries. Our defined benefit pension plan 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 $95 million contribution during the third quarter of 2023. The contribution generated a net benefit asset of $65.2 million and is presented separately from our unfunded plan as a non-current asset on our Statement of Financial Position as of September 30, 2023. Pension plan (income) cost includes the following components: Three months ended September 30, Nine months ended September 30, (in thousands) 2023 2022 2023 2022 Service cost for benefits earned $ 7,190 $ 12,560 $ 21,572 $ 37,681 Interest cost on benefit obligation 12,548 9,941 37,644 29,823 Expected return on plan assets (17,217) (13,639) (51,652) (40,917) Prior service cost amortization 362 361 1,085 1,082 Net actuarial (gain) loss amortization (3,833) 1,830 (11,498) 5,490 Pension plan (income) cost (1) $ (950) $ 11,053 $ (2,849) $ 33,159 (1) Pension plan (income) cost represents plan (income) cost before reimbursements between Indemnity and the Exchange and its subsidiaries. The components of pension plan (income) cost other than the service cost components are included in the line item " Other income |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 and 2022, our effective tax rate was 20.0% and 20.7%, respectively. For the nine months ended September 30, 2023 and 2022, our effective tax rate was 20.6% and 20.9%, respectively. |
Capital Stock
Capital Stock | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 and the year ended December 31, 2022. 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, 2023 and the year ended December 31, 2022. We had approximately $17.8 million of repurchase authority remaining under this program at September 30, 2023. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 September 30, 2022 (in thousands) Before Tax Income Tax Net Before Tax Income Tax Net Investment securities: AOCI (loss), beginning of period $ (55,497) $ (11,654) $ (43,843) $ (57,980) $ (12,177) $ (45,803) OCI (loss) before reclassifications (10,064) (2,114) (7,950) (26,524) (5,570) (20,954) Realized investment losses 2,480 521 1,959 4,606 968 3,638 Impairment losses 113 24 89 175 37 138 OCI (loss) (7,471) (1,569) (5,902) (21,743) (4,565) (17,178) AOCI (loss), end of period $ (62,968) $ (13,223) $ (49,745) $ (79,723) $ (16,742) $ (62,981) Pension and other postretirement plans: AOCI (loss), beginning of period $ 50,244 $ 10,551 $ 39,693 $ (35,346) $ (7,424) $ (27,922) Amortization of prior service costs 362 76 286 361 76 285 Amortization of net actuarial (gain) loss (3,833) (805) (3,028) 1,830 384 1,446 OCI (loss) (3,471) (729) (2,742) 2,191 460 1,731 AOCI (loss), end of period $ 46,773 $ 9,822 $ 36,951 $ (33,155) $ (6,964) $ (26,191) Total AOCI (loss), beginning of period $ (5,253) $ (1,103) $ (4,150) $ (93,326) $ (19,601) $ (73,725) Investment securities (7,471) (1,569) (5,902) (21,743) (4,565) (17,178) Pension and other postretirement plans (3,471) (729) (2,742) 2,191 460 1,731 OCI (loss) (10,942) (2,298) (8,644) (19,552) (4,105) (15,447) AOCI (loss), end of period $ (16,195) $ (3,401) $ (12,794) $ (112,878) $ (23,706) $ (89,172) Nine months ended Nine months ended September 30, 2023 September 30, 2022 (in thousands) Before Tax Income Tax Net Before Tax Income Tax Net Investment securities: AOCI (loss), beginning of period $ (66,571) $ (13,980) $ (52,591) $ 7,722 $ 1,621 $ 6,101 OCI (loss) before reclassifications (4,509) (947) (3,562) (96,982) (20,366) (76,616) Realized investment losses 6,195 1,301 4,894 9,108 1,913 7,195 Impairment losses 1,917 403 1,514 429 90 339 OCI (loss) 3,603 757 2,846 (87,445) (18,363) (69,082) AOCI (loss), end of period $ (62,968) $ (13,223) $ (49,745) $ (79,723) $ (16,742) $ (62,981) Pension and other postretirement plans: AOCI (loss), beginning of period $ 57,186 $ 12,009 $ 45,177 $ (39,734) $ (8,345) $ (31,389) Amortization of prior service costs 1,085 228 857 1,082 227 855 Amortization of net actuarial (gain) loss (11,498) (2,415) (9,083) 5,497 1,154 4,343 OCI (loss) (10,413) (2,187) (8,226) 6,579 1,381 5,198 AOCI (loss), end of period $ 46,773 $ 9,822 $ 36,951 $ (33,155) $ (6,964) $ (26,191) Total AOCI (loss), beginning of period $ (9,385) $ (1,971) $ (7,414) $ (32,012) $ (6,724) $ (25,288) Investment securities 3,603 757 2,846 (87,445) (18,363) (69,082) Pension and other postretirement plans (10,413) (2,187) (8,226) 6,579 1,381 5,198 OCI (loss) (6,810) (1,430) (5,380) (80,866) (16,982) (63,884) AOCI (loss), end of period $ (16,195) $ (3,401) $ (12,794) $ (112,878) $ (23,706) $ (89,172) |
Concentrations of Credit Risk
Concentrations of Credit Risk | 9 Months Ended |
Sep. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments could potentially expose us to concentrations of credit risk, including our unsecured receivables from the Exchange. The 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 $620.7 million and $524.9 million at September 30, 2023 and December 31, 2022, respectively, which includes a current expected credit loss allowance of $0.6 million in both periods. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We have an agreement with a bank for an agent loan participation program. 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, 2023, loans executed under this agreement totaled $59.1 million, of which our portion of the loans is $20.6 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, 2023, our maximum potential amount of future payments on the guaranteed portion is $6.9 million. All loan payments under the participation program are current as of September 30, 2023. 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 our financial condition, results of operations, or cash flows. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events No 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, 2023 | |
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, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. For further information, refer to the financial statements and footnotes included in our Form 10-K for the year ended December 31, 2022 as filed with the Securities and Exchange Commission on March 1, 2023. |
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 is 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, 2023, 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 our financial condition, results of operations, or cash flows. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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) 2023 2022 2023 2022 Management fee revenue - policy issuance and renewal services $ 649,049 $ 551,666 $ 1,840,478 $ 1,584,213 Management fee revenue - administrative services 16,151 14,657 46,976 43,446 Administrative services reimbursement revenue 187,118 168,653 544,411 492,655 Total revenue from administrative services $ 203,269 $ 183,310 $ 591,387 $ 536,101 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 2022 (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 $ 129,967 46,189,037 $ 2.81 $ 83,623 46,189,025 $ 1.81 Dilutive effect of stock-based awards 0 9,532 — 0 6,586 — Assumed conversion of Class B shares 1,073 6,100,800 — 690 6,100,800 — Class A – Diluted EPS: Income available to Class A stockholders on Class A equivalent shares $ 131,040 52,299,369 $ 2.51 $ 84,313 52,296,411 $ 1.61 Class B – Basic and diluted EPS: Income available to Class B stockholders $ 1,073 2,542 $ 422 $ 690 2,542 $ 272 Nine months ended September 30, 2023 2022 (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 $ 332,389 46,188,962 $ 7.20 $ 231,171 46,188,878 $ 5.00 Dilutive effect of stock-based awards 0 8,893 — 0 8,007 — Assumed conversion of Class B shares 2,744 6,100,800 — 1,908 6,100,800 — Class A – Diluted EPS: Income available to Class A stockholders on Class A equivalent shares $ 335,133 52,298,655 $ 6.41 $ 233,079 52,297,685 $ 4.46 Class B – Basic and diluted EPS: Income available to Class B stockholders $ 2,744 2,542 $ 1,079 $ 1,908 2,542 $ 751 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 (in thousands) Total Level 1 Level 2 Level 3 Available-for-sale securities: Corporate debt securities $ 566,967 $ 0 $ 562,862 $ 4,105 Collateralized debt obligations 110,488 0 110,488 0 Commercial mortgage-backed securities 72,032 0 64,625 7,407 Residential mortgage-backed securities 150,394 0 150,389 5 Other debt securities 15,356 0 15,356 0 Total available-for-sale securities 915,237 0 903,720 11,517 Equity securities: Financial services sector 65,071 796 60,819 3,456 Utilities sector 7,291 0 7,291 0 Energy sector 4,131 0 4,131 0 Consumer sector 2,288 0 2,288 0 Technology sector 500 0 0 500 Industrial sector 177 0 177 0 Communications sector 58 58 0 0 Total equity securities 79,516 854 74,706 3,956 Total $ 994,753 $ 854 $ 978,426 $ 15,473 December 31, 2022 (in thousands) Total Level 1 Level 2 Level 3 Available-for-sale securities: Corporate debt securities $ 553,382 $ 0 $ 549,696 $ 3,686 Collateralized debt obligations 102,537 0 102,537 0 Commercial mortgage-backed securities 66,054 0 55,144 10,910 Residential mortgage-backed securities 150,415 0 146,231 4,184 Other debt securities 22,273 0 22,273 0 Total available-for-sale securities 894,661 0 875,881 18,780 Equity securities: Financial services sector 61,084 0 57,305 3,779 Utilities sector 5,708 0 5,708 0 Energy sector 3,576 0 3,576 0 Consumer sector 1,854 0 1,854 0 Communications sector 338 0 338 0 Total equity securities 72,560 0 68,781 3,779 Total $ 967,221 $ 0 $ 944,662 $ 22,559 |
Schedule of Roll Forward of Level 3 Fair Value Measurements on a Recurring Basis | Level 3 Assets – 2023 Quarterly Change: (in thousands) Beginning balance at June 30, 2023 Included in earnings (1) Included Purchases Sales Transfers into Level 3 (2) Transfers out of Level 3 (2) Ending balance at September 30, 2023 Available-for-sale securities: Corporate debt securities $ 5,123 $ 10 $ 123 $ 1,661 $ (511) $ 730 $ (3,031) $ 4,105 Commercial mortgage-backed securities 6,533 (182) (56) 0 (366) 1,478 0 7,407 Residential mortgage- backed securities 12 0 0 0 (7) 0 0 5 Total available-for-sale securities 11,668 (172) 67 1,661 (884) 2,208 (3,031) 11,517 Equity securities 4,730 33 — 1,000 0 0 (1,807) 3,956 Total Level 3 securities $ 16,398 $ (139) $ 67 $ 2,661 $ (884) $ 2,208 $ (4,838) $ 15,473 Level 3 Assets – 2023 Year-to-Date Change: (in thousands) Beginning balance at December 31, 2022 Included in earnings (1) Included Purchases Sales Transfers into Level 3 (2) Transfers out of Level 3 (2) Ending balance at September 30, 2023 Available-for-sale securities: Corporate debt securities $ 3,686 $ (4) $ 245 $ 3,193 $ (1,256) $ 3,883 $ (5,642) $ 4,105 Commercial mortgage-backed securities 10,910 (542) 44 1,455 (551) 1,944 (5,853) 7,407 Residential mortgage- backed securities 4,184 (5) 96 0 (115) 33 (4,188) 5 Total available-for-sale securities 18,780 (551) 385 4,648 (1,922) 5,860 (15,683) 11,517 Equity securities 3,779 26 — 1,958 0 0 (1,807) 3,956 Total Level 3 securities $ 22,559 $ (525) $ 385 $ 6,606 $ (1,922) $ 5,860 $ (17,490) $ 15,473 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 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 1,848 Total Level 3 securities $ 31,881 $ (1,772) $ (3,530) $ 10,574 $ (16,911) $ 52,396 $ (54,486) $ 18,152 (1) These amounts are reported as net investment income and net realized and unrealized investment gains (losses) 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, 2023 December 31, 2022 (in thousands) Carrying value Fair value Carrying value Fair value Agent loans $ 68,192 $ 58,955 $ 69,476 $ 62,954 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 amortized cost and estimated fair value, net of credit loss allowance, of our available-for-sale securities as of: September 30, 2023 (in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair Corporate debt securities $ 596,538 $ 776 $ 30,347 $ 566,967 Collateralized debt obligations 113,252 64 2,828 110,488 Commercial mortgage-backed securities 78,491 90 6,549 72,032 Residential mortgage-backed securities 173,529 11 23,146 150,394 Other debt securities 16,298 0 942 15,356 Total available-for-sale securities, net $ 978,108 $ 941 $ 63,812 $ 915,237 December 31, 2022 (in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair Corporate debt securities $ 588,536 $ 657 $ 35,811 $ 553,382 Collateralized debt obligations 107,730 11 5,204 102,537 Commercial mortgage-backed securities 73,855 157 7,958 66,054 Residential mortgage-backed securities 166,412 72 16,069 150,415 Other debt securities 24,602 0 2,329 22,273 Total available-for-sale securities, net $ 961,135 $ 897 $ 67,371 $ 894,661 |
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, 2023 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, 2023 Amortized Estimated (in thousands) cost fair value Due in one year or less $ 63,056 $ 61,957 Due after one year through five years 431,382 409,557 Due after five years through ten years 171,654 164,848 Due after ten years 312,016 278,875 Total available-for-sale securities, net (1) $ 978,108 $ 915,237 (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, 2023. |
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, 2023 Less than 12 months 12 months or longer Total (dollars in thousands) Fair Unrealized Fair Unrealized Fair Unrealized No. of Corporate debt securities $ 173,565 $ 4,529 $ 345,584 $ 25,818 $ 519,149 $ 30,347 832 Collateralized debt obligations 7,010 39 93,940 2,789 100,950 2,828 154 Commercial mortgage-backed securities 33,208 1,064 30,692 5,485 63,900 6,549 156 Residential mortgage-backed securities 48,919 3,118 97,676 20,028 146,595 23,146 182 Other debt securities 7,605 121 7,752 821 15,357 942 39 Total available-for-sale securities $ 270,307 $ 8,871 $ 575,644 $ 54,941 $ 845,951 $ 63,812 1,363 Quality breakdown of available-for-sale securities: Investment grade $ 241,402 $ 8,142 $ 523,719 $ 48,245 $ 765,121 $ 56,387 814 Non-investment grade 28,905 729 51,925 6,696 80,830 7,425 549 Total available-for-sale securities $ 270,307 $ 8,871 $ 575,644 $ 54,941 $ 845,951 $ 63,812 1,363 December 31, 2022 Less than 12 months 12 months or longer Total (dollars in thousands) Fair Unrealized Fair Unrealized Fair Unrealized No. of Corporate debt securities $ 397,511 $ 21,371 $ 121,094 $ 14,440 $ 518,605 $ 35,811 916 Collateralized debt obligations 44,823 2,529 55,335 2,675 100,158 5,204 159 Commercial mortgage-backed securities 41,139 5,124 15,864 2,834 57,003 7,958 131 Residential mortgage-backed securities 109,499 9,131 31,465 6,938 140,964 16,069 161 Other debt securities 15,682 1,323 6,591 1,006 22,273 2,329 46 Total available-for-sale securities $ 608,654 $ 39,478 $ 230,349 $ 27,893 $ 839,003 $ 67,371 1,413 Quality breakdown of available-for-sale securities: Investment grade $ 525,805 $ 31,904 $ 215,742 $ 25,205 $ 741,547 $ 57,109 761 Non-investment grade 82,849 7,574 14,607 2,688 97,456 10,262 652 Total available-for-sale securities $ 608,654 $ 39,478 $ 230,349 $ 27,893 $ 839,003 $ 67,371 1,413 |
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) 2023 2022 2023 2022 Available-for-sale securities $ 11,037 $ 8,546 $ 31,404 $ 21,919 Equity securities 1,161 979 3,260 2,942 Limited partnerships (1) (13) (4,643) (10,725) (2,158) Cash equivalents and other 2,687 1,251 6,714 2,901 Total investment income 14,872 6,133 30,653 25,604 Less: investment expenses 230 299 293 998 Net investment income $ 14,642 $ 5,834 $ 30,360 $ 24,606 (1) Limited partnership losses include 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) 2023 2022 2023 2022 Available-for-sale securities: Gross realized gains $ 213 $ 146 $ 519 $ 1,055 Gross realized losses (2,693) (4,752) (6,714) (10,163) Net realized losses on available-for-sale securities (2,480) (4,606) (6,195) (9,108) Equity securities 244 (1,624) (3,060) (14,727) Miscellaneous 9 0 9 2 Net realized and unrealized investment losses $ (2,227) $ (6,230) $ (9,246) $ (23,833) The portion of net unrealized gains (losses) 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) 2023 2022 2023 2022 Equity securities: Net gains (losses) recognized during the period $ 244 $ (1,624) $ (3,060) $ (14,727) Less: net gains (losses) recognized on securities sold 91 243 (2,636) (1,327) Net unrealized gains (losses) recognized on securities held at reporting date $ 153 $ (1,867) $ (424) $ (13,400) |
Schedule of Impairments on Available-For-Sale Securities | Impairments on available-for-sale securities were as follows: Three months ended September 30, Nine months ended September 30, (in thousands) 2023 2022 2023 2022 Available-for-sale securities: Intent to sell $ (58) $ (45) $ (1,639) $ (146) Credit (55) (130) (278) (283) Net impairment losses recognized in earnings $ (113) $ (175) $ (1,917) $ (429) |
Postretirement Benefits (Tables
Postretirement Benefits (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Retirement Benefits [Abstract] | |
Schedule of Pension Plan (Income) Cost | Pension plan (income) cost includes the following components: Three months ended September 30, Nine months ended September 30, (in thousands) 2023 2022 2023 2022 Service cost for benefits earned $ 7,190 $ 12,560 $ 21,572 $ 37,681 Interest cost on benefit obligation 12,548 9,941 37,644 29,823 Expected return on plan assets (17,217) (13,639) (51,652) (40,917) Prior service cost amortization 362 361 1,085 1,082 Net actuarial (gain) loss amortization (3,833) 1,830 (11,498) 5,490 Pension plan (income) cost (1) $ (950) $ 11,053 $ (2,849) $ 33,159 (1) Pension plan (income) cost represents plan (income) cost before reimbursements between Indemnity and the Exchange and its subsidiaries. The components of pension plan (income) cost other than the service cost components are included in the line item " Other income |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 September 30, 2022 (in thousands) Before Tax Income Tax Net Before Tax Income Tax Net Investment securities: AOCI (loss), beginning of period $ (55,497) $ (11,654) $ (43,843) $ (57,980) $ (12,177) $ (45,803) OCI (loss) before reclassifications (10,064) (2,114) (7,950) (26,524) (5,570) (20,954) Realized investment losses 2,480 521 1,959 4,606 968 3,638 Impairment losses 113 24 89 175 37 138 OCI (loss) (7,471) (1,569) (5,902) (21,743) (4,565) (17,178) AOCI (loss), end of period $ (62,968) $ (13,223) $ (49,745) $ (79,723) $ (16,742) $ (62,981) Pension and other postretirement plans: AOCI (loss), beginning of period $ 50,244 $ 10,551 $ 39,693 $ (35,346) $ (7,424) $ (27,922) Amortization of prior service costs 362 76 286 361 76 285 Amortization of net actuarial (gain) loss (3,833) (805) (3,028) 1,830 384 1,446 OCI (loss) (3,471) (729) (2,742) 2,191 460 1,731 AOCI (loss), end of period $ 46,773 $ 9,822 $ 36,951 $ (33,155) $ (6,964) $ (26,191) Total AOCI (loss), beginning of period $ (5,253) $ (1,103) $ (4,150) $ (93,326) $ (19,601) $ (73,725) Investment securities (7,471) (1,569) (5,902) (21,743) (4,565) (17,178) Pension and other postretirement plans (3,471) (729) (2,742) 2,191 460 1,731 OCI (loss) (10,942) (2,298) (8,644) (19,552) (4,105) (15,447) AOCI (loss), end of period $ (16,195) $ (3,401) $ (12,794) $ (112,878) $ (23,706) $ (89,172) Nine months ended Nine months ended September 30, 2023 September 30, 2022 (in thousands) Before Tax Income Tax Net Before Tax Income Tax Net Investment securities: AOCI (loss), beginning of period $ (66,571) $ (13,980) $ (52,591) $ 7,722 $ 1,621 $ 6,101 OCI (loss) before reclassifications (4,509) (947) (3,562) (96,982) (20,366) (76,616) Realized investment losses 6,195 1,301 4,894 9,108 1,913 7,195 Impairment losses 1,917 403 1,514 429 90 339 OCI (loss) 3,603 757 2,846 (87,445) (18,363) (69,082) AOCI (loss), end of period $ (62,968) $ (13,223) $ (49,745) $ (79,723) $ (16,742) $ (62,981) Pension and other postretirement plans: AOCI (loss), beginning of period $ 57,186 $ 12,009 $ 45,177 $ (39,734) $ (8,345) $ (31,389) Amortization of prior service costs 1,085 228 857 1,082 227 855 Amortization of net actuarial (gain) loss (11,498) (2,415) (9,083) 5,497 1,154 4,343 OCI (loss) (10,413) (2,187) (8,226) 6,579 1,381 5,198 AOCI (loss), end of period $ 46,773 $ 9,822 $ 36,951 $ (33,155) $ (6,964) $ (26,191) Total AOCI (loss), beginning of period $ (9,385) $ (1,971) $ (7,414) $ (32,012) $ (6,724) $ (25,288) Investment securities 3,603 757 2,846 (87,445) (18,363) (69,082) Pension and other postretirement plans (10,413) (2,187) (8,226) 6,579 1,381 5,198 OCI (loss) (6,810) (1,430) (5,380) (80,866) (16,982) (63,884) AOCI (loss), end of period $ (16,195) $ (3,401) $ (12,794) $ (112,878) $ (23,706) $ (89,172) |
Nature of Operations (Details)
Nature of Operations (Details) | 9 Months Ended |
Sep. 30, 2023 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, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) obligation | Sep. 30, 2022 USD ($) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
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 | $ | $ 7.7 | $ 7.4 | $ 31.5 | $ 30.1 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | ||||
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, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of revenue by performance obligation | ||||
Revenue | $ 858,938 | $ 741,236 | $ 2,451,273 | $ 2,139,489 |
Management fee revenue - policy issuance and renewal services | ||||
Disaggregation of revenue by performance obligation | ||||
Revenue | 649,049 | 551,666 | 1,840,478 | 1,584,213 |
Management fee revenue - policy issuance and renewal services | Transferred At Point in Time | ||||
Disaggregation of revenue by performance obligation | ||||
Revenue | 649,049 | 551,666 | 1,840,478 | 1,584,213 |
Administrative services | Transferred Over Time | ||||
Disaggregation of revenue by performance obligation | ||||
Revenue | 203,269 | 183,310 | 591,387 | 536,101 |
Management fee revenue - administrative services | ||||
Disaggregation of revenue by performance obligation | ||||
Revenue | 16,151 | 14,657 | 46,976 | 43,446 |
Management fee revenue - administrative services | Transferred Over Time | ||||
Disaggregation of revenue by performance obligation | ||||
Revenue | 16,151 | 14,657 | 46,976 | 43,446 |
Administrative services reimbursement revenue | ||||
Disaggregation of revenue by performance obligation | ||||
Revenue | 187,118 | 168,653 | 544,411 | 492,655 |
Administrative services reimbursement revenue | Transferred Over Time | ||||
Disaggregation of revenue by performance obligation | ||||
Revenue | $ 187,118 | $ 168,653 | $ 544,411 | $ 492,655 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) | Sep. 30, 2023 | Dec. 31, 2022 |
Class B common stock | ||
Reconciliation of the numerators and denominators used in the basic and diluted per-share computations | ||
Ratio for converting shares of Class B common stock into shares of Class A common stock | 2,400 | 2,400 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Reconciliation of the Numerators and Denominators Used in the Basic and Diluted Per-Share Computations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Class A common stock | ||||
Income available to stockholders (Basic EPS:) | ||||
Allocated net income (numerator) | $ 129,967 | $ 83,623 | $ 332,389 | $ 231,171 |
Weighted shares (denominator) (in shares) | 46,189,037 | 46,189,025 | 46,188,962 | 46,188,878 |
Per-share amount (in dollars per share) | $ 2.81 | $ 1.81 | $ 7.20 | $ 5 |
Dilutive effect of stock-based awards | ||||
Allocated net income (numerator) | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted shares (denominator) (in shares) | 9,532 | 6,586 | 8,893 | 8,007 |
Assumed conversion of Class B shares | ||||
Allocated net income (numerator) | $ 1,073 | $ 690 | $ 2,744 | $ 1,908 |
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) | $ 131,040 | $ 84,313 | $ 335,133 | $ 233,079 |
Weighted shares (denominator) (in shares) | 52,299,369 | 52,296,411 | 52,298,655 | 52,297,685 |
Per-share amount (in dollars per share) | $ 2.51 | $ 1.61 | $ 6.41 | $ 4.46 |
Class B common stock | ||||
Income available to stockholders (Basic EPS:) | ||||
Allocated net income (numerator) | $ 1,073 | $ 690 | $ 2,744 | $ 1,908 |
Weighted shares (denominator) (in shares) | 2,542 | 2,542 | 2,542 | 2,542 |
Per-share amount (in dollars per share) | $ 422 | $ 272 | $ 1,079 | $ 751 |
Income available to stockholders on equivalent shares (Diluted EPS:) | ||||
Allocated net income (numerator) | $ 1,073 | $ 690 | $ 2,744 | $ 1,908 |
Weighted shares (denominator) (in shares) | 2,542 | 2,542 | 2,542 | 2,542 |
Per-share amount (in dollars per share) | $ 422 | $ 272 | $ 1,079 | $ 751 |
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, 2023 | Dec. 31, 2022 |
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | $ 915,237 | |
Available-for-sale securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 915,237 | $ 894,661 |
Corporate debt securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 566,967 | 553,382 |
Collateralized debt obligations | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 110,488 | 102,537 |
Commercial mortgage-backed securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 72,032 | 66,054 |
Residential mortgage-backed securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 150,394 | 150,415 |
Other debt securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total available-for-sale securities | 15,356 | 22,273 |
Fair Value, Measurements, Recurring Basis | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total | 994,753 | 967,221 |
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 | 915,237 | 894,661 |
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 | 566,967 | 553,382 |
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 | 110,488 | 102,537 |
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 | 72,032 | 66,054 |
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 | 150,394 | 150,415 |
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 | 15,356 | 22,273 |
Fair Value, Measurements, Recurring Basis | Equity securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 79,516 | 72,560 |
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 | 65,071 | 61,084 |
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 | 7,291 | 5,708 |
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 | 4,131 | 3,576 |
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 | 2,288 | 1,854 |
Fair Value, Measurements, Recurring Basis | Equity securities | Technology sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 500 | |
Fair Value, Measurements, Recurring Basis | Equity securities | Industrial sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 177 | |
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 | 58 | 338 |
Fair Value, Measurements, Recurring Basis | Level 1 | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total | 854 | 0 |
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 | Equity securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 854 | 0 |
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 | 796 | 0 |
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 | 0 |
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 | Technology 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 1 | Equity securities | Industrial 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 1 | Equity securities | Communications sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 58 | 0 |
Fair Value, Measurements, Recurring Basis | Level 2 | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total | 978,426 | 944,662 |
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 | 903,720 | 875,881 |
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 | 562,862 | 549,696 |
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 | 110,488 | 102,537 |
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 | 64,625 | 55,144 |
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 | 150,389 | 146,231 |
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 | 15,356 | 22,273 |
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 | 74,706 | 68,781 |
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 | 60,819 | 57,305 |
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 | 7,291 | 5,708 |
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 | 4,131 | 3,576 |
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 | 2,288 | 1,854 |
Fair Value, Measurements, Recurring Basis | Level 2 | Equity securities | Technology 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 | Equity securities | Industrial sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 177 | |
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 | 0 | 338 |
Fair Value, Measurements, Recurring Basis | Level 3 | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total | 15,473 | 22,559 |
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 | 11,517 | 18,780 |
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 | 4,105 | 3,686 |
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 | 7,407 | 10,910 |
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 | 5 | 4,184 |
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 | Equity securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 3,956 | 3,779 |
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 | 3,456 | 3,779 |
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 | Technology sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | 500 | |
Fair Value, Measurements, Recurring Basis | Level 3 | Equity securities | Industrial 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 3 | Equity securities | Communications sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total equity securities | $ 0 | $ 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, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Roll forward of level 3 fair value measurements on a recurring basis | ||||
Beginning balance | $ 16,398 | $ 59,395 | $ 22,559 | $ 31,881 |
Included in earnings | (139) | (880) | (525) | (1,772) |
Included in other comprehensive income (loss) | 67 | (2,149) | 385 | (3,530) |
Purchases | 2,661 | 753 | 6,606 | 10,574 |
Sales | (884) | (7,781) | (1,922) | (16,911) |
Transfers into Level 3 | 2,208 | 4,747 | 5,860 | 52,396 |
Transfers out of Level 3 | (4,838) | (35,933) | (17,490) | (54,486) |
Ending balance | 15,473 | 18,152 | 15,473 | 18,152 |
Available-for-sale Securities | ||||
Roll forward of level 3 fair value measurements on a recurring basis | ||||
Beginning balance | 11,668 | 57,529 | 18,780 | 29,798 |
Included in earnings | (172) | (862) | (551) | (1,537) |
Included in other comprehensive income (loss) | 67 | (2,149) | 385 | (3,530) |
Purchases | 1,661 | 753 | 4,648 | 10,574 |
Sales | (884) | (7,781) | (1,922) | (16,911) |
Transfers into Level 3 | 2,208 | 4,747 | 5,860 | 52,396 |
Transfers out of Level 3 | (3,031) | (35,933) | (15,683) | (54,486) |
Ending balance | 11,517 | 16,304 | 11,517 | 16,304 |
Corporate debt securities | Available-for-sale Securities | ||||
Roll forward of level 3 fair value measurements on a recurring basis | ||||
Beginning balance | 5,123 | 6,109 | 3,686 | 5,256 |
Included in earnings | 10 | (7) | (4) | (2) |
Included in other comprehensive income (loss) | 123 | (28) | 245 | (417) |
Purchases | 1,661 | 753 | 3,193 | 5,687 |
Sales | (511) | (495) | (1,256) | (3,614) |
Transfers into Level 3 | 730 | 2,899 | 3,883 | 8,673 |
Transfers out of Level 3 | (3,031) | (1,956) | (5,642) | (8,308) |
Ending balance | 4,105 | 7,275 | 4,105 | 7,275 |
Commercial mortgage-backed securities | Available-for-sale Securities | ||||
Roll forward of level 3 fair value measurements on a recurring basis | ||||
Beginning balance | 6,533 | 8,871 | 10,910 | 15,728 |
Included in earnings | (182) | (188) | (542) | (892) |
Included in other comprehensive income (loss) | (56) | (413) | 44 | (1,071) |
Purchases | 0 | 0 | 1,455 | 0 |
Sales | (366) | (660) | (551) | (3,825) |
Transfers into Level 3 | 1,478 | 1,174 | 1,944 | 5,509 |
Transfers out of Level 3 | 0 | (3,417) | (5,853) | (10,082) |
Ending balance | 7,407 | 5,367 | 7,407 | 5,367 |
Residential mortgage- backed securities | Available-for-sale Securities | ||||
Roll forward of level 3 fair value measurements on a recurring basis | ||||
Beginning balance | 12 | 42,549 | 4,184 | 8,814 |
Included in earnings | 0 | (667) | (5) | (643) |
Included in other comprehensive income (loss) | 0 | (1,708) | 96 | (2,042) |
Purchases | 0 | 0 | 0 | 4,887 |
Sales | (7) | (6,626) | (115) | (9,472) |
Transfers into Level 3 | 0 | 674 | 33 | 38,214 |
Transfers out of Level 3 | 0 | (30,560) | (4,188) | (36,096) |
Ending balance | 5 | 3,662 | 5 | 3,662 |
Equity securities | Equity securities | ||||
Roll forward of level 3 fair value measurements on a recurring basis | ||||
Beginning balance | 4,730 | 1,866 | 3,779 | 2,083 |
Included in earnings | 33 | (18) | 26 | (235) |
Included in other comprehensive income (loss) | 0 | 0 | 0 | 0 |
Purchases | 1,000 | 0 | 1,958 | 0 |
Sales | 0 | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | (1,807) | 0 | (1,807) | 0 |
Ending balance | $ 3,956 | $ 1,848 | $ 3,956 | $ 1,848 |
Fair Value - Financial Instrume
Fair Value - Financial Instruments Not Carried at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Carrying value | ||
Carrying value and fair value measurements of financial instruments not carried at fair value | ||
Agent loans | $ 68,192 | $ 69,476 |
Fair value | Level 3 Fair Value | ||
Carrying value and fair value measurements of financial instruments not carried at fair value | ||
Agent loans | $ 58,955 | $ 62,954 |
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, 2023 | Dec. 31, 2022 |
Available-for-sale securities | ||
Amortized cost | $ 978,108 | |
Estimated fair value | 915,237 | |
Corporate debt securities | ||
Available-for-sale securities | ||
Amortized cost | 596,538 | $ 588,536 |
Gross unrealized gains | 776 | 657 |
Gross unrealized losses | 30,347 | 35,811 |
Estimated fair value | 566,967 | 553,382 |
Collateralized debt obligations | ||
Available-for-sale securities | ||
Amortized cost | 113,252 | 107,730 |
Gross unrealized gains | 64 | 11 |
Gross unrealized losses | 2,828 | 5,204 |
Estimated fair value | 110,488 | 102,537 |
Commercial mortgage-backed securities | ||
Available-for-sale securities | ||
Amortized cost | 78,491 | 73,855 |
Gross unrealized gains | 90 | 157 |
Gross unrealized losses | 6,549 | 7,958 |
Estimated fair value | 72,032 | 66,054 |
Residential mortgage- backed securities | ||
Available-for-sale securities | ||
Amortized cost | 173,529 | 166,412 |
Gross unrealized gains | 11 | 72 |
Gross unrealized losses | 23,146 | 16,069 |
Estimated fair value | 150,394 | 150,415 |
Other debt securities | ||
Available-for-sale securities | ||
Amortized cost | 16,298 | 24,602 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 942 | 2,329 |
Estimated fair value | 15,356 | 22,273 |
Available-for-sale securities | ||
Available-for-sale securities | ||
Amortized cost | 978,108 | 961,135 |
Gross unrealized gains | 941 | 897 |
Gross unrealized losses | 63,812 | 67,371 |
Estimated fair value | $ 915,237 | $ 894,661 |
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, 2023 USD ($) |
Amortized cost | |
Due in one year or less | $ 63,056 |
Due after one year through five years | 431,382 |
Due after five years through ten years | 171,654 |
Due after ten years | 312,016 |
Amortized cost | 978,108 |
Estimated fair value | |
Due in one year or less | 61,957 |
Due after one year through five years | 409,557 |
Due after five years through ten years | 164,848 |
Due after ten years | 278,875 |
Estimated fair value | $ 915,237 |
Investments - Available-For-Sal
Investments - Available-For-Sale Securities in a Gross Unrealized Loss Position by Length of Time (Details) $ in Thousands | Sep. 30, 2023 USD ($) holding | Dec. 31, 2022 USD ($) holding |
Investment grade | ||
Fair value | ||
Less than 12 months | $ 241,402 | $ 525,805 |
12 months or longer | 523,719 | 215,742 |
Total | 765,121 | 741,547 |
Unrealized losses | ||
Less than 12 months | 8,142 | 31,904 |
12 months or longer | 48,245 | 25,205 |
Total | $ 56,387 | $ 57,109 |
No. of holdings | holding | 814 | 761 |
Non-investment grade | ||
Fair value | ||
Less than 12 months | $ 28,905 | $ 82,849 |
12 months or longer | 51,925 | 14,607 |
Total | 80,830 | 97,456 |
Unrealized losses | ||
Less than 12 months | 729 | 7,574 |
12 months or longer | 6,696 | 2,688 |
Total | $ 7,425 | $ 10,262 |
No. of holdings | holding | 549 | 652 |
Corporate debt securities | ||
Fair value | ||
Less than 12 months | $ 173,565 | $ 397,511 |
12 months or longer | 345,584 | 121,094 |
Total | 519,149 | 518,605 |
Unrealized losses | ||
Less than 12 months | 4,529 | 21,371 |
12 months or longer | 25,818 | 14,440 |
Total | $ 30,347 | $ 35,811 |
No. of holdings | holding | 832 | 916 |
Collateralized debt obligations | ||
Fair value | ||
Less than 12 months | $ 7,010 | $ 44,823 |
12 months or longer | 93,940 | 55,335 |
Total | 100,950 | 100,158 |
Unrealized losses | ||
Less than 12 months | 39 | 2,529 |
12 months or longer | 2,789 | 2,675 |
Total | $ 2,828 | $ 5,204 |
No. of holdings | holding | 154 | 159 |
Commercial mortgage-backed securities | ||
Fair value | ||
Less than 12 months | $ 33,208 | $ 41,139 |
12 months or longer | 30,692 | 15,864 |
Total | 63,900 | 57,003 |
Unrealized losses | ||
Less than 12 months | 1,064 | 5,124 |
12 months or longer | 5,485 | 2,834 |
Total | $ 6,549 | $ 7,958 |
No. of holdings | holding | 156 | 131 |
Residential mortgage- backed securities | ||
Fair value | ||
Less than 12 months | $ 48,919 | $ 109,499 |
12 months or longer | 97,676 | 31,465 |
Total | 146,595 | 140,964 |
Unrealized losses | ||
Less than 12 months | 3,118 | 9,131 |
12 months or longer | 20,028 | 6,938 |
Total | $ 23,146 | $ 16,069 |
No. of holdings | holding | 182 | 161 |
Other debt securities | ||
Fair value | ||
Less than 12 months | $ 7,605 | $ 15,682 |
12 months or longer | 7,752 | 6,591 |
Total | 15,357 | 22,273 |
Unrealized losses | ||
Less than 12 months | 121 | 1,323 |
12 months or longer | 821 | 1,006 |
Total | $ 942 | $ 2,329 |
No. of holdings | holding | 39 | 46 |
Available-for-sale securities | ||
Fair value | ||
Less than 12 months | $ 270,307 | $ 608,654 |
12 months or longer | 575,644 | 230,349 |
Total | 845,951 | 839,003 |
Unrealized losses | ||
Less than 12 months | 8,871 | 39,478 |
12 months or longer | 54,941 | 27,893 |
Total | $ 63,812 | $ 67,371 |
No. of holdings | holding | 1,363 | 1,413 |
Investments - Credit Loss Allow
Investments - Credit Loss Allowance (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Investments [Abstract] | ||
Agent loans, allowance for credit loss | $ 1 | $ 1 |
Available-for-sale securities, allowance for credit loss | $ 0.4 | $ 0.2 |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Investment income (loss) from portfolios | ||||
Total investment income | $ 14,872 | $ 6,133 | $ 30,653 | $ 25,604 |
Less: investment expenses | 230 | 299 | 293 | 998 |
Net investment income | 14,642 | 5,834 | 30,360 | 24,606 |
Available-for-sale securities | ||||
Investment income (loss) from portfolios | ||||
Available-for-sale, equity securities, cash equivalents, and other | 11,037 | 8,546 | 31,404 | 21,919 |
Equity securities | ||||
Investment income (loss) from portfolios | ||||
Available-for-sale, equity securities, cash equivalents, and other | 1,161 | 979 | 3,260 | 2,942 |
Limited partnerships | ||||
Investment income (loss) from portfolios | ||||
Limited partnerships | (13) | (4,643) | (10,725) | (2,158) |
Cash equivalents and other | ||||
Investment income (loss) from portfolios | ||||
Available-for-sale, equity securities, cash equivalents, and other | $ 2,687 | $ 1,251 | $ 6,714 | $ 2,901 |
Investments - Net Realized and
Investments - Net Realized and Unrealized Investment Gains (Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Equity securities: | ||||
Equity securities | $ 244 | $ (1,624) | $ (3,060) | $ (14,727) |
Net realized and unrealized investment gains (losses) | ||||
Net realized and unrealized investment losses | (2,227) | (6,230) | (9,246) | (23,833) |
Available-for-sale securities | ||||
Available-for-sale securities: | ||||
Gross realized gains | 213 | 146 | 519 | 1,055 |
Gross realized losses | (2,693) | (4,752) | (6,714) | (10,163) |
Net realized losses on available-for-sale securities | (2,480) | (4,606) | (6,195) | (9,108) |
Equity securities | ||||
Equity securities: | ||||
Equity securities | 244 | (1,624) | (3,060) | (14,727) |
Miscellaneous | ||||
Net realized and unrealized investment gains (losses) | ||||
Miscellaneous | $ 9 | $ 0 | $ 9 | $ 2 |
Investments - Portion of Net Un
Investments - Portion of Net Unrealized Gains (Losses) Recognized During the Reporting Period (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Equity securities: | ||||
Net gains (losses) recognized during the period | $ 244 | $ (1,624) | $ (3,060) | $ (14,727) |
Less: net gains (losses) recognized on securities sold | 91 | 243 | (2,636) | (1,327) |
Net unrealized gains (losses) recognized on securities held at reporting date | $ 153 | $ (1,867) | $ (424) | $ (13,400) |
Investments - Impairments on Av
Investments - Impairments on Available-For-Sale Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Available-for-sale securities: | ||||
Intent to sell | $ (58) | $ (45) | $ (1,639) | $ (146) |
Credit | (55) | (130) | (278) | (283) |
Net impairment losses recognized in earnings | $ (113) | $ (175) | $ (1,917) | $ (429) |
Bank Line of Credit - Narrative
Bank Line of Credit - Narrative (Details) - Revolving line of credit | Sep. 30, 2023 USD ($) |
Bank line of credit | |
Maximum borrowing capacity under the bank revolving line of credit | $ 100,000,000 |
Maximum letter of credit sublimit under the bank revolving line of credit | 25,000,000 |
Available borrowing capacity under the bank revolving line of credit, due to outstanding letters of credit | 99,100,000 |
Outstanding amount of letters of credit sublimit under the bank revolving line of credit | 900,000 |
Available amount of letters of credit sublimit under the bank revolving line of credit | 24,100,000 |
Borrowings outstanding under the bank revolving line of credit | 0 |
Security owned and pledged as collateral, associated liabilities, fair value | $ 114,200,000 |
Postretirement Benefits (Detail
Postretirement Benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Postretirement Benefits | |||||
Defined benefit plan asset | $ 65,163 | $ 65,163 | $ 0 | ||
Cost of pension plans: | |||||
Service cost for benefits earned | 7,190 | $ 12,560 | 21,572 | $ 37,681 | |
Interest cost on benefit obligation | 12,548 | 9,941 | 37,644 | 29,823 | |
Expected return on plan assets | (17,217) | (13,639) | (51,652) | (40,917) | |
Prior service cost amortization | 362 | 361 | 1,085 | 1,082 | |
Net actuarial (gain) loss amortization | (3,833) | 1,830 | (11,498) | 5,490 | |
Pension plan (income) cost | $ (950) | $ 11,053 | $ (2,849) | $ 33,159 | |
Defined benefit plan, net periodic benefit cost (credit) excluding service cost, statement of income or comprehensive income | Other income | ||||
Employee pension plan | Funded Plan | Qualified Plan | |||||
Postretirement Benefits | |||||
Funding target (as a percentage of the funding target liability) | 100% | 100% | |||
Defined benefit plan, plan assets, contributions by employer | $ 95,000 | ||||
Defined benefit plan asset | $ 65,200 | $ 65,200 | |||
Erie Insurance Exchange | Employee pension plan | Funded Plan | Qualified Plan | |||||
Postretirement Benefits | |||||
Postretirement annual benefit income and expense reimbursed to and from, respectively, the Exchange and its subsidiaries (as a percent) | 60% | ||||
Erie Insurance Exchange | Supplemental employee retirement plan (SERP) | Unfunded Plan | Nonqualified Plan | |||||
Postretirement Benefits | |||||
Postretirement annual benefit income and expense reimbursed to and from, respectively, the Exchange and its subsidiaries (as a percent) | 36% |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate (as a percent) | 20% | 20.70% | 20.60% | 20.90% |
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, 2023 shares | Dec. 31, 2022 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, 2023 | Dec. 31, 2022 | 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, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Accumulated other comprehensive income (loss), net of tax | ||||||||
AOCI (loss), beginning of period | $ (7,414) | $ (7,414) | ||||||
Investment securities, OCI (loss) | $ (5,902) | $ (17,178) | 2,846 | $ (69,082) | ||||
Pension and other postretirement plans, OCI (loss) | (2,742) | 1,731 | (8,226) | 5,198 | ||||
OCI (loss) | (8,644) | $ (4,488) | 7,752 | (15,447) | $ (23,248) | $ (25,189) | (5,380) | (63,884) |
AOCI (loss), end of period | (12,794) | (12,794) | ||||||
Investment securities: | ||||||||
Accumulated other comprehensive income (loss), before tax | ||||||||
AOCI (loss), beginning of period | (55,497) | (66,571) | (57,980) | 7,722 | (66,571) | 7,722 | ||
OCI (loss) before reclassifications | (10,064) | (26,524) | (4,509) | (96,982) | ||||
Realized investment losses | 2,480 | 4,606 | 6,195 | 9,108 | ||||
Impairment losses | 113 | 175 | 1,917 | 429 | ||||
Investment securities, OCI (loss) | (7,471) | (21,743) | 3,603 | (87,445) | ||||
AOCI (loss), end of period | (62,968) | (55,497) | (79,723) | (57,980) | (62,968) | (79,723) | ||
Accumulated other comprehensive income (loss), tax | ||||||||
AOCI (loss), beginning of period | (11,654) | (13,980) | (12,177) | 1,621 | (13,980) | 1,621 | ||
OCI (loss) before reclassifications | (2,114) | (5,570) | (947) | (20,366) | ||||
Realized investment losses | 521 | 968 | 1,301 | 1,913 | ||||
Impairment losses | 24 | 37 | 403 | 90 | ||||
Investment securities, OCI (loss) | (1,569) | (4,565) | 757 | (18,363) | ||||
AOCI (loss), end of period | (13,223) | (11,654) | (16,742) | (12,177) | (13,223) | (16,742) | ||
Accumulated other comprehensive income (loss), net of tax | ||||||||
AOCI (loss), beginning of period | (43,843) | (52,591) | (45,803) | 6,101 | (52,591) | 6,101 | ||
OCI (loss) before reclassifications | (7,950) | (20,954) | (3,562) | (76,616) | ||||
Realized investment losses | 1,959 | 3,638 | 4,894 | 7,195 | ||||
Impairment losses | 89 | 138 | 1,514 | 339 | ||||
Investment securities, OCI (loss) | (5,902) | (17,178) | 2,846 | (69,082) | ||||
AOCI (loss), end of period | (49,745) | (43,843) | (62,981) | (45,803) | (49,745) | (62,981) | ||
Pension and other postretirement plans: | ||||||||
Accumulated other comprehensive income (loss), before tax | ||||||||
AOCI (loss), beginning of period | 50,244 | 57,186 | (35,346) | (39,734) | 57,186 | (39,734) | ||
Amortization of prior service costs | 362 | 361 | 1,085 | 1,082 | ||||
Amortization of net actuarial (gain) loss | (3,833) | 1,830 | (11,498) | 5,497 | ||||
Pension and other postretirement plans, OCI (loss) | (3,471) | 2,191 | (10,413) | 6,579 | ||||
AOCI (loss), end of period | 46,773 | 50,244 | (33,155) | (35,346) | 46,773 | (33,155) | ||
Accumulated other comprehensive income (loss), tax | ||||||||
AOCI (loss), beginning of period | 10,551 | 12,009 | (7,424) | (8,345) | 12,009 | (8,345) | ||
Amortization of prior service costs | 76 | 76 | 228 | 227 | ||||
Amortization of net actuarial (gain) loss | (805) | 384 | (2,415) | 1,154 | ||||
Pension and other postretirement plans, OCI (loss) | (729) | 460 | (2,187) | 1,381 | ||||
AOCI (loss), end of period | 9,822 | 10,551 | (6,964) | (7,424) | 9,822 | (6,964) | ||
Accumulated other comprehensive income (loss), net of tax | ||||||||
AOCI (loss), beginning of period | 39,693 | 45,177 | (27,922) | (31,389) | 45,177 | (31,389) | ||
Amortization of prior service costs | 286 | 285 | 857 | 855 | ||||
Amortization of net actuarial (gain) loss | (3,028) | 1,446 | (9,083) | 4,343 | ||||
Pension and other postretirement plans, OCI (loss) | (2,742) | 1,731 | (8,226) | 5,198 | ||||
AOCI (loss), end of period | 36,951 | 39,693 | (26,191) | (27,922) | 36,951 | (26,191) | ||
Total | ||||||||
Accumulated other comprehensive income (loss), before tax | ||||||||
AOCI (loss), beginning of period | (5,253) | (9,385) | (93,326) | (32,012) | (9,385) | (32,012) | ||
Investment securities, OCI (loss) | (7,471) | (21,743) | 3,603 | (87,445) | ||||
Pension and other postretirement plans, OCI (loss) | (3,471) | 2,191 | (10,413) | 6,579 | ||||
OCI (loss) | (10,942) | (19,552) | (6,810) | (80,866) | ||||
AOCI (loss), end of period | (16,195) | (5,253) | (112,878) | (93,326) | (16,195) | (112,878) | ||
Accumulated other comprehensive income (loss), tax | ||||||||
AOCI (loss), beginning of period | (1,103) | (1,971) | (19,601) | (6,724) | (1,971) | (6,724) | ||
Investment securities, OCI (loss) | (1,569) | (4,565) | 757 | (18,363) | ||||
Pension and other postretirement plans, OCI (loss) | (729) | 460 | (2,187) | 1,381 | ||||
OCI (loss) | (2,298) | (4,105) | (1,430) | (16,982) | ||||
AOCI (loss), end of period | (3,401) | (1,103) | (23,706) | (19,601) | (3,401) | (23,706) | ||
Accumulated other comprehensive income (loss), net of tax | ||||||||
AOCI (loss), beginning of period | (4,150) | (7,414) | (73,725) | (25,288) | (7,414) | (25,288) | ||
Investment securities, OCI (loss) | (5,902) | (17,178) | 2,846 | (69,082) | ||||
Pension and other postretirement plans, OCI (loss) | (2,742) | 1,731 | (8,226) | 5,198 | ||||
OCI (loss) | (8,644) | (4,488) | $ 7,752 | (15,447) | (23,248) | $ (25,189) | (5,380) | (63,884) |
AOCI (loss), end of period | $ (12,794) | $ (4,150) | $ (89,172) | $ (73,725) | $ (12,794) | $ (89,172) |
Concentrations of Credit Risk (
Concentrations of Credit Risk (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Concentration Risk [Line Items] | ||
Receivables from Erie Insurance Exchange and affiliates, net | $ 620,683 | $ 524,937 |
Receivables from Erie Insurance Exchange, allowance for credit loss | 600 | 600 |
Affiliated Entity | ||
Concentration Risk [Line Items] | ||
Receivables from Erie Insurance Exchange and affiliates, net | $ 620,700 | $ 524,900 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Loan Purchase Commitments $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Other Commitments [Line Items] | |
Minimum funding percentage of each loan | 30% |
Participation amount in loan program | $ 20.6 |
Loan program, guaranteed amount | 6.9 |
Third-Party Bank | |
Other Commitments [Line Items] | |
Amount of loan participation program | 59.1 |
Third-Party Bank | Maximum | |
Other Commitments [Line Items] | |
Amount of loan participation program | $ 100 |