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Summary of Investments
 9 Months Ended
Sep. 30, 2020
Investments, Debt and Equity Securities [Abstract]  
Summary of Investments SUMMARY OF INVESTMENTS
Fair Value of Investments
A reconciliation of the amortized cost (cost for equity securities) to fair value of investments in available-for-sale fixed maturity and equity securities, presented on a consolidated basis, as of September 30, 2020 and December 31, 2019, is provided below:
September 30, 2020
Type of InvestmentCost or Amortized Cost Gross Unrealized Appreciation Gross Unrealized Depreciation Fair ValueAllowance for Credit LossesCarrying Value
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury$53,877 $730 $8 $54,599 $— $54,599 
U.S. government agency60,503 4,457 — 64,960 — 64,960 
States, municipalities and political subdivisions
General obligations:
Midwest79,872 4,106 — 83,978 — 83,978 
Northeast29,124 1,426 — 30,550 — 30,550 
South105,290 5,295 — 110,585 — 110,585 
West102,772 7,175 — 109,947 — 109,947 
Special revenue:
Midwest126,251 8,590 — 134,841 — 134,841 
Northeast58,287 4,557 — 62,844 — 62,844 
South220,904 17,446 — 238,350 — 238,350 
West133,934 9,168 — 143,102 — 143,102 
Foreign bonds26,413 1,835 230 28,018 — 28,018 
Public utilities77,147 7,155 — 84,302 — 84,302 
Corporate bonds
Energy24,912 2,589 — 27,501 — 27,501 
Industrials39,558 3,499 — 43,057 — 43,057 
Consumer goods and services45,250 3,790 12 49,028 — 49,028 
Health care6,674 895 — 7,569 — 7,569 
Technology, media and telecommunications37,241 4,330 — 41,571 — 41,571 
Financial services95,696 7,030 267 102,459 8 102,451 
Mortgage-backed securities14,333 305 109 14,529 — 14,529 
Collateralized mortgage obligations
Government national mortgage association71,992 5,206 1 77,197 — 77,197 
Federal home loan mortgage corporation119,006 3,019 349 121,676 — 121,676 
Federal national mortgage association83,276 2,579 406 85,449 — 85,449 
Asset-backed securities314 621 — 935 — 935 
Total Available-for-Sale Fixed Maturities$1,612,626 $105,803 $1,382 $1,717,047 $8 $1,717,039 
December 31, 2019
Type of InvestmentCost or Amortized Cost Gross Unrealized Appreciation Gross Unrealized DepreciationFair Value
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury$69,300 $203 $12 $69,491 
U.S. government agency97,962 2,344 104 100,202 
States, municipalities and political subdivisions
General obligations:
Midwest85,607 2,987 — 88,594 
Northeast30,120 1,150 — 31,270 
South111,688 3,515 — 115,203 
West105,569 4,748 — 110,317 
Special revenue:
Midwest133,717 6,175 — 139,892 
Northeast58,665 2,878 — 61,543 
South224,214 10,452 — 234,666 
West138,557 6,287 — 144,844 
Foreign bonds4,936 181 — 5,117 
Public utilities60,950 2,701 — 63,651 
Corporate bonds
Energy28,695 1,429 — 30,124 
Industrials52,249 1,766 — 54,015 
Consumer goods and services47,131 2,335 — 49,466 
Health care8,998 482 — 9,480 
Technology, media and telecommunications25,931 1,739 — 27,670 
Financial services96,613 3,870 230 100,253 
Mortgage-backed securities6,250 127 21 6,356 
Collateralized mortgage obligations
Government national mortgage association78,400 2,053 97 80,356 
Federal home loan mortgage corporation123,572 1,150 220 124,502 
Federal national mortgage association70,322 1,631 108 71,845 
Asset-backed securities314 436 — 750 
Total Available-for-Sale Fixed Maturities$1,659,760 $60,639 $792 $1,719,607 
Maturities
The amortized cost and fair value of available-for-sale and trading fixed maturity securities at September 30, 2020, by contractual maturity, are shown in the following tables. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Asset-backed securities, mortgage-backed securities and collateralized mortgage obligations may be subject to prepayment risk and are therefore not categorized by contractual maturity.
Maturities
Available-For-Sale Trading
September 30, 2020Amortized Cost Fair Value Amortized Cost Fair Value
Due in one year or less$53,911  $54,386  $1,957  $3,935 
Due after one year through five years365,831  388,192  9,221  9,265 
Due after five years through 10 years401,105  433,321  —  — 
Due after 10 years502,858  541,362  1,080  1,611 
Asset-backed securities314 935 — — 
Mortgage-backed securities14,333  14,529  —  — 
Collateralized mortgage obligations274,274  284,322  —  — 
Allowance for credit losses— (8)— — 
 $1,612,626  $1,717,039  $12,258  $14,811 
Net Realized Investment Gains and Losses
Net realized gains on disposition of investments are computed using the specific identification method and are included in the computation of net income. A summary of the components of net realized investment gains (losses) is as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2020 201920202019
Net realized investment gains (losses):   
Fixed maturities:
Available-for-sale$52 $129 $52 $271 
Allowance for credit losses2 — (8)— 
Trading securities
Change in fair value248 43 (760)2,290 
Sales134 8 (20)100 
Equity securities
Change in fair value21,962 9,692 (38,876)46,825 
Sales(7,186)(50)(22,772)655 
Mortgage loans allowance for credit losses— — (4)(15)
Real estate— — (28)— 
Total net realized investment gains (losses)$15,212  $9,822 $(62,416)$50,126 

The proceeds and gross realized gains on the sale of available-for-sale fixed maturity securities are as follows:
 Three Months Ended September 30,Nine Months Ended September 30,
2020 201920202019
Proceeds from sales$—  $— $16,907 $36,490 
Gross realized gains—  — 198 30 
Gross realized losses—  — 495 13 

Our investment portfolio includes trading securities with embedded derivatives. These securities are primarily convertible securities which are recorded at fair value. Income or loss, including the change in the fair value of these trading securities, is recognized currently in earnings as a component of net realized investment gains. Our portfolio of trading securities had a fair value of $14,811 and $15,256 at September 30, 2020 and December 31, 2019, respectively.
Funding Commitment

Pursuant to an agreement with one of our limited liability partnership investments, we are contractually committed through July 10, 2030 to make capital contributions upon request of the partnership. Our remaining potential contractual obligation was $10,284 at September 30, 2020.

In addition, the Company invested $25,000 in December 2019 in a limited liability partnership investment fund which is subject to a 3-year lockup with a 60 day minimum notice, with 4 possible repurchase dates per year, after the 3-year lockup period is met. The fair value of the investment at September 30, 2020 was $24,035 and there are no remaining capital contributions with this investment.
Unrealized Appreciation
A summary of the changes in net unrealized investment appreciation during the reporting period is as follows:
 Nine Months Ended September 30,
2020 2019
Change in net unrealized investment appreciation   
Available-for-sale fixed maturities$44,574 $77,103 
Income tax effect(9,361)(16,192)
Total change in net unrealized investment appreciation, net of tax$35,213  $60,911 
Credit Risk
An allowance for credit losses is recorded based on a number of factors including the current economic conditions, management's expectations of future economic conditions and performance indicators, such as market value vs. amortized cost, investment spreads widening or contracting, rating actions, payment and default history. The following table contains a rollforward of the allowance for credit losses for available-for-sale fixed maturity securities at September 30, 2020:
Rollforward of allowance for credit losses for available-for-sale fixed maturity securities:
As of
September 30, 2020
Beginning balance, January 1, 2020$— 
Additions to the allowance for credit losses for which credit losses were not previously recorded8 
Reductions for securities sold during the period (realized)— 
Writeoffs charged against the allowance— 
Recoveries of amounts previously written off— 
Ending balance, September 30, 2020$8 
The following tables summarize our fixed maturity securities that were in an unrealized loss position reported on a consolidated basis at September 30, 2020 and December 31, 2019. The securities are presented by the length of time they have been continuously in an unrealized loss position. Non-credit related unrealized losses are recognized as a component of other comprehensive income and represent other market movements that are not credit related, for example interest rate changes. We have no intent to sell, and it is more likely than not that we will not be required to sell, these securities until the fair value recovers to at least equal our cost basis or the securities mature.
September 30, 2020Less than 12 months12 months or longerTotal
Type of InvestmentNumber
of Issues		Fair
Value		Gross Unrealized
Depreciation		Number
of Issues		Fair
Value		Gross Unrealized DepreciationFair
Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury2 $11,804 $8 — $— $— $11,804 $8 
Foreign bonds1 $2,776 $230 — $— $— $2,776 $230 
Corporate bonds
Consumer goods and services1 2,196 12 — — — 2,196 12 
Financial services1 2,998 2 1 3,000 9 5,998 11 
Mortgage-backed securities2 9,118 107 6 157 2 9,275 109 
Collateralized mortgage obligations
Federal home loan mortgage corporation14 48,062 348 1 57 1 48,119 349 
Federal national mortgage association10 43,684 406 — — — 43,684 406 
Government national mortgage association— — — 1 76 1 76 1 
Total Available-for-Sale Fixed Maturities31 $120,638 $1,113 9 $3,290 $13 $123,928 $1,126 

The unrealized losses on our investments in available-for-sale fixed maturities were the result of interest rate movements. We have no intent to sell, and it is more likely than not that we will not be required to sell, these securities until the fair value recovers to at least equal our cost basis or the securities mature.
December 31, 2019Less than 12 months12 months or longerTotal
Type of InvestmentNumber
of Issues		Fair
Value		Gross Unrealized DepreciationNumber
of Issues		Fair
Value		Gross Unrealized DepreciationFair
Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury— $— $— 2 $4,733 $12 $4,733 $12 
U.S. government agency3 13,846 104 — — — 13,846 104 
Corporate bonds
Financial services3 10,906 142 1 4,913 88 15,819 230 
Mortgage-backed securities— — — 13 1,585 21 1,585 21 
Collateralized mortgage obligations
Federal home loan mortgage corporation12 50,829 183 3 4,844 37 55,673 220 
Federal national mortgage association4 23,515 90 3 1,102 18 24,617 108 
Government national mortgage association2 8,444 38 5 3,053 59 11,497 97 
Total Available-for-Sale Fixed Maturities24 $107,540 $557 27 $20,230 $235 $127,770 $792