Investments

12 Months Ended

Dec. 31, 2021

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

Table of Contents

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.

Table of Contents

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