| Investments |
5.Investments
The amortized cost and estimated fair value of fixed income securities as of December 31, 2021 and 2020 were as follows:
|
|
|
December 31, 2021 |
| |
|
|
Cost or Amortized
Cost |
|
|
Gross Unrealized
Gains |
|
|
Gross Unrealized
Losses |
|
|
Fair Value |
| |
Fixed income securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
U.S. Government and agencies |
|
$ |
13,118 |
|
|
$ |
467 |
|
|
$ |
(87 |
) |
|
$ |
13,498 |
| |
Obligations of states and political subdivisions |
|
|
84,668 |
|
|
|
2,979 |
|
|
|
(353 |
) |
|
|
87,294 |
| |
Corporate securities |
|
|
144,476 |
|
|
|
4,214 |
|
|
|
(1,069 |
) |
|
|
147,621 |
| |
Residential mortgage-backed securities |
|
|
26,190 |
|
|
|
266 |
|
|
|
(300 |
) |
|
|
26,156 |
| |
Commercial mortgage-backed securities |
|
|
32,878 |
|
|
|
815 |
|
|
|
(161 |
) |
|
|
33,532 |
| |
Asset-backed securities |
|
|
52,604 |
|
|
|
131 |
|
|
|
(313 |
) |
|
|
52,422 |
| |
Redeemable preferred stocks |
|
|
4,008 |
|
|
|
136 |
|
|
|
(16 |
) |
|
|
4,128 |
| |
Total fixed income securities |
|
$ |
357,942 |
|
|
$ |
9,008 |
|
|
$ |
(2,299 |
) |
|
$ |
364,651 |
|
|
|
|
December 31, 2020 |
| |
|
|
Cost or Amortized
Cost |
|
|
Gross Unrealized
Gains |
|
|
Gross Unrealized
Losses |
|
|
Fair Value |
| |
Fixed income securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
U.S. Government and agencies |
|
$ |
13,334 |
|
|
$ |
1,055 |
|
|
$ |
(6 |
) |
|
$ |
14,383 |
| |
Obligations of states and political subdivisions |
|
|
61,001 |
|
|
|
3,278 |
|
|
|
(35 |
) |
|
|
64,244 |
| |
Corporate securities |
|
|
117,628 |
|
|
|
8,549 |
|
|
|
(147 |
) |
|
|
126,030 |
| |
Residential mortgage-backed securities |
|
|
35,017 |
|
|
|
1,478 |
|
|
|
(1 |
) |
|
|
36,494 |
| |
Commercial mortgage-backed securities |
|
|
23,976 |
|
|
|
1,700 |
|
|
|
(21 |
) |
|
|
25,655 |
| |
Asset-backed securities |
|
|
50,751 |
|
|
|
535 |
|
|
|
(86 |
) |
|
|
51,200 |
| |
Redeemable preferred stocks |
|
|
2,198 |
|
|
|
206 |
|
|
|
- |
|
|
|
2,404 |
| |
Total fixed income securities |
|
$ |
303,905 |
|
|
$ |
16,801 |
|
|
$ |
(296 |
) |
|
$ |
320,410 |
|
The amortized cost and estimated fair value of fixed income securities by contractual maturity are shown below. Actual maturities could differ from contractual maturities because issuers may have the right to call or prepay these securities.
|
|
|
December 31, 2021 |
| |
|
|
Amortized Cost |
|
|
Fair Value |
| |
Due to mature: |
|
|
|
|
|
|
|
| |
One year or less |
|
$ |
14,457 |
|
|
$ |
14,586 |
| |
After one year through five years |
|
|
82,429 |
|
|
|
84,760 |
| |
After five years through ten years |
|
|
82,270 |
|
|
|
84,173 |
| |
After ten years |
|
|
63,106 |
|
|
|
64,894 |
| |
Mortgage / asset-backed securities |
|
|
111,672 |
|
|
|
112,110 |
| |
Redeemable preferred stocks |
|
|
4,008 |
|
|
|
4,128 |
| |
Total fixed income securities |
|
$ |
357,942 |
|
|
$ |
364,651 |
|
|
|
|
December 31, 2020 |
| |
|
|
Amortized Cost |
|
|
Fair Value |
| |
Due to mature: |
|
|
|
|
|
|
|
| |
One year or less |
|
$ |
17,722 |
|
|
$ |
17,933 |
| |
After one year through five years |
|
|
86,709 |
|
|
|
91,457 |
| |
After five years through ten years |
|
|
59,408 |
|
|
|
64,987 |
| |
After ten years |
|
|
28,124 |
|
|
|
30,280 |
| |
Mortgage / asset-backed securities |
|
|
109,744 |
|
|
|
113,349 |
| |
Redeemable preferred stocks |
|
|
2,198 |
|
|
|
2,404 |
| |
Total fixed income securities |
|
$ |
303,905 |
|
|
$ |
320,410 |
|
Fixed income securities with a fair value of $7,977 at December 31, 2021 and $6,093 at December 31, 2020 were deposited with various state regulatory agencies as required by law. The Company has not pledged any assets to secure any obligations.
The investment category and duration of the Company’s gross unrealized losses on fixed income securities were as follows:
|
|
|
December 31, 2021 |
| |
|
|
Less than 12 Months |
|
|
Greater than 12 months |
|
|
Total |
| |
|
|
Fair
Value |
|
|
Unrealized
Losses |
|
|
Fair
Value |
|
|
Unrealized
Losses |
|
|
Fair
Value |
|
|
Unrealized
Losses |
| |
Fixed income securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
U.S. Government and agencies |
|
$ |
3,125 |
|
|
$ |
(87 |
) |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
3,125 |
|
|
$ |
(87 |
) | |
Obligations of states and political subdivisions |
|
|
19,769 |
|
|
|
(350 |
) |
|
|
222 |
|
|
|
(3 |
) |
|
|
19,991 |
|
|
|
(353 |
) | |
Corporate securities |
|
|
46,816 |
|
|
|
(1,015 |
) |
|
|
1,895 |
|
|
|
(54 |
) |
|
|
48,711 |
|
|
|
(1,069 |
) | |
Residential mortgage-backed securities |
|
|
17,407 |
|
|
|
(261 |
) |
|
|
1,434 |
|
|
|
(39 |
) |
|
|
18,841 |
|
|
|
(300 |
) | |
Commercial mortgage-backed securities |
|
|
11,287 |
|
|
|
(160 |
) |
|
|
216 |
|
|
|
(1 |
) |
|
|
11,503 |
|
|
|
(161 |
) | |
Asset-backed securities |
|
|
28,797 |
|
|
|
(308 |
) |
|
|
995 |
|
|
|
(5 |
) |
|
|
29,792 |
|
|
|
(313 |
) | |
Redeemable preferred stocks |
|
|
1,493 |
|
|
|
(16 |
) |
|
|
- |
|
|
|
- |
|
|
|
1,493 |
|
|
|
(16 |
) | |
Total fixed income securities |
|
$ |
128,694 |
|
|
$ |
(2,197 |
) |
|
$ |
4,762 |
|
|
$ |
(102 |
) |
|
$ |
133,456 |
|
|
$ |
(2,299 |
) |
|
|
|
December 31, 2020 |
| |
|
|
Less than 12 Months |
|
|
Greater than 12 months |
|
|
Total |
| |
|
|
Fair
Value |
|
|
Unrealized
Losses |
|
|
Fair
Value |
|
|
Unrealized
Losses |
|
|
Fair
Value |
|
|
Unrealized
Losses |
| |
Fixed income securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
U.S. Government and agencies |
|
$ |
931 |
|
|
$ |
(6 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
931 |
|
|
$ |
(6 |
) | |
Obligations of states and political subdivisions |
|
|
1,806 |
|
|
|
(35 |
) |
|
|
— |
|
|
|
— |
|
|
|
1,806 |
|
|
|
(35 |
) | |
Corporate securities |
|
|
3,215 |
|
|
|
(97 |
) |
|
|
734 |
|
|
|
(50 |
) |
|
|
3,949 |
|
|
|
(147 |
) | |
Residential mortgage-backed securities |
|
|
68 |
|
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
|
68 |
|
|
|
(1 |
) | |
Commercial mortgage-backed securities |
|
|
1,103 |
|
|
|
(21 |
) |
|
|
— |
|
|
|
— |
|
|
|
1,103 |
|
|
|
(21 |
) | |
Asset-backed securities |
|
|
5,785 |
|
|
|
(31 |
) |
|
|
4,188 |
|
|
|
(55 |
) |
|
|
9,973 |
|
|
|
(86 |
) | |
Total fixed income securities |
|
$ |
12,908 |
|
|
$ |
(191 |
) |
|
$ |
4,922 |
|
|
$ |
(105 |
) |
|
$ |
17,830 |
|
|
$ |
(296 |
) |
Investments with unrealized losses are categorized with a duration of greater than 12 months when all positions of a security have continually been in a loss position for at least 12 months.
We frequently review our investment portfolio for declines in fair value. Our process for identifying declines in the fair value of investments that are other-than-temporary involves consideration of several factors. These factors include (i) the time period in which there has been a significant decline in value, (ii) an analysis of the liquidity, business prospects, and overall financial condition of the issuer, (iii) the significance of the decline, and (iv) our intent and ability to hold the investment for a sufficient period of time for the value to recover. When our analysis of the above factors results in the conclusion that declines in fair values are other-than-temporary, the credit loss component of the impairment is reflected in net income (loss) as a realized capital loss on investment if the Company does not intend to sell the security, and the remaining portion of the other-than-temporary loss is recognized in other comprehensive income (loss), net of income taxes. If the Company intends to sell the security, or determines that it is more likely than not that it will be required to sell the security prior to recovering its cost or amortized cost basis less any current-period credit losses, the full amount of the other-than-temporary loss is recognized in net income (loss). The Company did not record any other-than-temporary impairments in 2021, 2020, or 2019.
In conjunction with our outside investment advisors, we analyzed the credit ratings of the securities as well as the historical monthly amortized cost to fair value ratio of securities in an unrealized loss position. This analysis yielded no fixed income securities that had fair values less than 80% of amortized cost for the preceding 12-month period.
Net investment income consisted of the following:
|
|
|
Year Ended December 31, |
| |
|
|
2021 |
|
|
2020 |
|
|
2019 |
| |
Fixed income securities |
|
$ |
8,489 |
|
|
$ |
8,682 |
|
|
$ |
8,394 |
| |
Equity securities |
|
|
1,221 |
|
|
|
1,220 |
|
|
|
996 |
| |
Real estate |
|
|
625 |
|
|
|
587 |
|
|
|
365 |
| |
Cash and cash equivalents |
|
|
4 |
|
|
|
30 |
|
|
|
71 |
| |
Total gross investment income |
|
|
10,339 |
|
|
|
10,519 |
|
|
|
9,826 |
| |
Investment expenses |
|
|
3,208 |
|
|
|
3,248 |
|
|
|
2,393 |
| |
Net investment income |
|
$ |
7,131 |
|
|
$ |
7,271 |
|
|
$ |
7,433 |
|
Net realized capital gain on investments consisted of the following:
|
|
|
Year Ended December 31, |
| |
|
|
2021 |
|
|
2020 |
|
|
2019 |
| |
Gross realized gains: |
|
|
|
|
|
|
|
|
|
|
|
| |
Fixed income securities |
|
$ |
677 |
|
|
$ |
1,035 |
|
|
$ |
341 |
| |
Equity securities |
|
|
17,453 |
|
|
|
8,705 |
|
|
|
4,311 |
| |
Total gross realized gains |
|
|
18,130 |
|
|
|
9,740 |
|
|
|
4,652 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Gross realized losses, excluding other-than-temporary impairment losses: |
|
|
|
|
|
|
|
|
|
|
|
| |
Fixed income securities |
|
|
(27 |
) |
|
|
(132 |
) |
|
|
(147 |
) | |
Equity securities |
|
|
(335 |
) |
|
|
(1,837 |
) |
|
|
(1,259 |
) | |
Total gross realized losses, excluding other-than-temporary impairment losses |
|
|
(362 |
) |
|
|
(1,969 |
) |
|
|
(1,406 |
) | |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net realized gain on investments |
|
|
17,768 |
|
|
|
7,771 |
|
|
|
3,246 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Change in net unrealized gain on equity securities |
|
|
(2,289 |
) |
|
|
5,853 |
|
|
|
11,537 |
| |
Net capital gain on investments |
|
$ |
15,479 |
|
|
$ |
13,624 |
|
|
$ |
14,783 |
|
|