Summary of Investments

6 Months Ended

Jun. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Summary of Investments

SUMMARY OF INVESTMENTS

Fair Value of Investments

A reconciliation of the amortized cost to fair value of investments in available-for-sale fixed maturity and short-term investments, presented on a consolidated basis, as of June 30, 2021 and December 31, 2020, is provided below:

June 30, 2021
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value		Allowance for Credit Losses		Carrying Value
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	73,072	$	318	$	420	$	72,970	$	—	$	72,970
U.S. government agency	79,070		3,073		1,071		81,072		—		81,072
States, municipalities and political subdivisions
General obligations:
Midwest	70,118		3,155		—		73,273		—		73,273
Northeast	28,964		1,010		—		29,974		—		29,974
South	93,271		4,694		—		97,965		—		97,965
West	97,282		6,334		—		103,616		—		103,616
Special revenue:
Midwest	119,011		8,481		—		127,492		—		127,492
Northeast	56,067		4,392		—		60,459		—		60,459
South	202,317		16,266		49		218,534		—		218,534
West	130,229		9,225		—		139,454		—		139,454
Foreign bonds	26,359		1,199		73		27,485		—		27,485
Public utilities	95,984		5,907		88		101,803		—		101,803
Corporate bonds
Energy	24,296		2,418		—		26,714		—		26,714
Industrials	52,095		3,094		76		55,113		—		55,113
Consumer goods and services	65,280		3,221		434		68,067		—		68,067
Health care	28,984		704		302		29,386		—		29,386
Technology, media and telecommunications	66,175		4,261		852		69,584		—		69,584
Financial services	93,396		5,807		282		98,921		170		98,751
Mortgage-backed securities	24,800		268		162		24,906		—		24,906
Collateralized mortgage obligations
Government national mortgage association	97,913		3,648		1,065		100,496		—		100,496
Federal home loan mortgage corporation	127,051		1,398		1,086		127,363		—		127,363
Federal national mortgage association	45,166		1,517		186		46,497		—		46,497
Asset-backed securities	319		572		—		891		—		891
Total Available-for-Sale Fixed Maturities	$	1,697,219	$	90,962	$	6,146	$	1,782,035	$	170	$	1,781,865
Short-Term Investments	$	800	$	1	—		$	801	$	—	$	801
Total Available-for-Sale Investments	$	1,698,019	$	90,963	$	6,146	$	1,782,836	$	170	$	1,782,666

December 31, 2020
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value		Allowance for Credit Losses		Carrying Value
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	149,481	$	482	$	25	$	149,938	$	—	$	149,938
U.S. government agency	60,502		4,016		—		64,518		—		64,518
States, municipalities and political subdivisions
General obligations:
Midwest	77,933		4,047		—		81,980		—		81,980
Northeast	29,071		1,379		—		30,450		—		30,450
South	104,522		5,448		—		109,970		—		109,970
West	102,590		7,431		—		110,021		—		110,021
Special revenue:
Midwest	115,956		9,142		—		125,098		—		125,098
Northeast	56,317		4,759		—		61,076		—		61,076
South	208,739		17,967		—		226,706		—		226,706
West	129,417		9,982		—		139,399		—		139,399
Foreign bonds	27,799		1,805		2		29,602		—		29,602
Public utilities	76,114		7,388		—		83,502		—		83,502
Corporate bonds
Energy	22,441		2,895		—		25,336		—		25,336
Industrials	39,513		3,744		—		43,257		—		43,257
Consumer goods and services	46,521		4,046		—		50,567		—		50,567
Health care	6,678		898		—		7,576		—		7,576
Technology, media and telecommunications	37,270		4,381		15		41,636		—		41,636
Financial services	93,736		7,564		269		101,031		5		101,026
Mortgage-backed securities	20,305		326		54		20,577		—		20,577
Collateralized mortgage obligations
Government national mortgage association	81,758		4,439		45		86,152		—		86,152
Federal home loan mortgage corporation	151,362		2,239		758		152,843		—		152,843
Federal national mortgage association	81,952		2,013		683		83,282		—		83,282
Asset-backed securities	314		612		—		926		—		926
Total Available-for-Sale Fixed Maturities	$	1,720,291	$	107,003	$	1,851	$	1,825,443	$	5	$	1,825,438

Maturities

The amortized cost and fair value of available-for-sale fixed maturity securities at June 30, 2021, 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
June 30, 2021	Amortized Cost		Fair Value
Due in one year or less	$	36,922	$	37,394
Due after one year through five years	482,542		508,398
Due after five years through 10 years	364,841		386,365
Due after 10 years	517,665		549,725
Asset-backed securities	319		891
Mortgage-backed securities	24,800		24,906
Collateralized mortgage obligations	270,130		274,356
	$	1,697,219	$	1,782,035

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 June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net realized investment gains (losses):
Fixed maturities:
Available-for-sale	$	136	$	30	$	(501)	$	—
Allowance for credit losses	5		49		(165)		(10)
Trading Securities	—		1,296		—		(1,162)
Equity securities
Change in the fair value	1,245		29,809		21,827		(60,838)
Sales	4,618		(15,406)		9,351		(15,586)
Mortgage loans allowance for credit losses	—		1		—		(4)
Real estate	—		—		—		(28)
Total net realized investment gains (losses)	$	6,004	$	15,779	$	30,512	$	(77,628)

The proceeds and gross realized gains on the sale of available-for-sale fixed maturity securities are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Proceeds from sales	$	16,982	$	4,996	$	116,664	$	16,907
Gross realized gains	152		26		153		198
Gross realized losses	17		113		655		495

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 $3,846 at June 30, 2021.

In addition, the Company invested $25,000 in December 2019 in a limited liability partnership investment fund which is subject to a three-year lockup with a 60 day minimum notice, with four possible repurchase dates per year, after the three-year lockup period is met. The fair value of the investment at June 30, 2021 was $24,776 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:

	Six Months Ended June 30,
	2021		2020
Change in net unrealized investment appreciation
Available-for-sale fixed maturities	$	(20,335)	$	40,511
Income tax effect	4,270		(8,507)
Total change in net unrealized investment appreciation, net of tax	$	(16,065)	$	32,004

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 June 30, 2021:

Rollforward of allowance for credit losses for available-for-sale fixed maturity securities:
	As of
	June 30, 2021
Beginning balance, January 1, 2021	$	5
Additions to the allowance for credit losses for which credit losses were not previously recorded	170
Recoveries of amounts previously written off	(5)
Ending balance, June 30, 2021	$	170

The following tables summarize our fixed maturity securities that were in an unrealized loss position reported on a consolidated basis at June 30, 2021 and December 31, 2020. 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.

June 30, 2021	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	7	$	45,079	$	420	—	$	—	$	—	$	45,079	$	420
U.S. government agency	4	28,498		1,071		—	—		—		28,498		1,071
States, municipalities and political subdivisions
General obligations
South	1	1,224		49		—	—		—		1,224		49
Foreign bonds	2	2,930		73		—	—		—		2,930		73
Public utilities	5	13,513		88		—	—		—		13,513		88
Corporate bonds
Industrials	2	5,977		76		—	—		—		5,977		76
Consumer goods and services	6	16,690		434		—	—		—		16,690		434
Health care	2	18,936		302		—	—		—		18,936		302
Technology, media and telecommunications	5	16,198		853		—	—		—		16,198		853
Financial services	3	6,497		26		—	—		—		6,497		26
Mortgage-backed securities	6	16,879		163		—	—		—		16,879		163
Collateralized mortgage obligations
Federal home loan mortgage corporation	21	82,021		1,076		1	880		10		82,901		1,086
Federal national mortgage association	8	16,727		162		1	1,359		24		18,086		186
Government national mortgage association	5	22,329		1,065		—	—		—		22,329		1,065
Total Available-for-Sale Fixed Maturities	77	$	293,498	$	5,858	2	$	2,239	$	34	$	295,737	$	5,892

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, 2020	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	5	$	86,371	$	25	—	$	—	$	—	$	86,371	$	25
Foreign bonds	1	2,000		2		—	—		—		2,000		2
Technology, media and telecommunications	1	2,020		15		—	—		—		2,020		15
Financial services	1	2,995		5		1	3,000		7		5,995		12
Mortgage-backed securities	2	8,099		53		5	118		1		8,217		54
Collateralized mortgage obligations
Federal home loan mortgage corporation	24	97,691		758		1	26		—		97,717		758
Federal national mortgage association	10	44,677		683		—	—		—		44,677		683
Government national mortgage association	2	12,394		45		1	24		—		12,418		45
Total Available-for-Sale Fixed Maturities	46	$	256,247	$	1,586	8	$	3,168	$	8	$	259,415	$	1,594