Investments

6 Months Ended

Jun. 30, 2022

Available-for-sale securities

See Note 5, "Fair Value" for additional fair value disclosures. The following tables summarize the cost and estimated fair value, net of credit loss allowance, of our available-for-sale securities as of:


	June 30, 2022
(in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value




Corporate debt securities	$	586,857	$	187	$	33,921	$	553,123
Collateralized debt obligations	102,868		52		3,701		99,219
Commercial mortgage-backed securities	74,778		49		5,978		68,849
Residential mortgage-backed securities	150,035		56		13,088		137,003
Other debt securities	21,771		17		1,406		20,382
U.S. Treasury	11,296		5		150		11,151
Total available-for-sale securities, net	$	947,605	$	366	$	58,244	$	889,727


	December 31, 2021
(in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value




Corporate debt securities	$	565,997	$	9,663	$	2,495	$	573,165
Collateralized debt obligations	115,344		456		338		115,462
Commercial mortgage-backed securities	88,636		1,465		777		89,324
Residential mortgage-backed securities	140,217		1,007		1,302		139,922
Other debt securities	23,859		197		136		23,920
U.S. Treasury	4,226		73		7		4,292
Total available-for-sale securities, net	$	938,279	$	12,861	$	5,055	$	946,085

The amortized cost and estimated fair value of available-for-sale securities at June 30, 2022 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.


	June 30, 2022
	Amortized		Estimated
(in thousands)	cost		fair value
Due in one year or less	$	57,501	$	57,107
Due after one year through five years	408,070		389,070
Due after five years through ten years	193,835		180,451
Due after ten years	288,199		263,099
Total available-for-sale securities (1)	$	947,605	$	889,727

(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 June 30, 2022.

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:


	June 30, 2022
	Less than 12 months				12 months or longer				Total
(dollars in thousands)	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses		No. of holdings





Corporate debt securities	$	518,575	$	30,975	$	26,993	$	2,946	$	545,568	$	33,921	1,006
Collateralized debt obligations	73,825		2,684		22,805		1,017		96,630		3,701		148
Commercial mortgage-backed securities	60,844		5,394		3,827		584		64,671		5,978		121
Residential mortgage-backed securities	127,928		11,922		6,696		1,166		134,624		13,088		147
Other debt securities	19,121		1,406		0		0		19,121		1,406		41
U.S. Treasury	8,560		150		0		0		8,560		150		3
Total available-for-sale securities	$	808,853	$	52,531	$	60,321	$	5,713	$	869,174	$	58,244	1,466
Quality breakdown of available-for-sale securities:
Investment grade	$	703,654	$	41,032	$	54,745	$	5,033	$	758,399	$	46,065	719
Non-investment grade	105,199		11,499		5,576		680		110,775		12,179		747
Total available-for-sale securities	$	808,853	$	52,531	$	60,321	$	5,713	$	869,174	$	58,244	1,466


	December 31, 2021
	Less than 12 months				12 months or longer				Total
(dollars in thousands)	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses		No. of holdings





Corporate debt securities	$	179,281	$	1,912	$	12,494	$	583	$	191,775	$	2,495	441
Collateralized debt obligations	64,270		278		9,370		60		73,640		338		104
Commercial mortgage-backed securities	28,001		595		917		182		28,918		777		61
Residential mortgage-backed securities	89,460		1,278		441		24		89,901		1,302		98
Other debt securities	14,576		136		0		0		14,576		136		24
U.S. Treasury	388		7		0		0		388		7		1
Total available-for-sale securities	$	375,976	$	4,206	$	23,222	$	849	$	399,198	$	5,055	729
Quality breakdown of available-for-sale securities:
Investment grade	$	330,697	$	3,801	$	17,112	$	434	$	347,809	$	4,235	366
Non-investment grade	45,279		405		6,110		415		51,389		820		363
Total available-for-sale securities	$	375,976	$	4,206	$	23,222	$	849	$	399,198	$	5,055	729

Credit loss allowance on investments

The current expected credit loss allowance on agent loans was $1.0 million at both June 30, 2022 and December 31, 2021. The current expected credit loss allowance on available-for-sale securities was $0.1 million at June 30, 2022 and less than $0.1 million at December 31, 2021.

Net investment income

Investment income (loss), net of expenses, was generated from the following portfolios:


	Three months ended June 30,				Six months ended June 30,
(in thousands)	2022		2021		2022		2021
Available-for-sale securities	$	7,015	$	5,790	$	13,373	$	11,987
Equity securities	975		1,116		1,963		2,318
Limited partnerships (1)	(290)		6,151		2,485		15,197
Cash equivalents and other	865		935		1,650		1,912
Total investment income	8,565		13,992		19,471		31,414
Less: investment expenses	297		342		699		667
Net investment income	$	8,268	$	13,650	$	18,772	$	30,747

(1)Equity in (losses) earnings of limited partnerships includes 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.

Realized and unrealized investment gains (losses)

Realized and unrealized gains (losses) on investments were as follows:


	Three months ended June 30,				Six months ended June 30,
(in thousands)	2022		2021		2022		2021
Available-for-sale securities:
Gross realized gains	$	418	$	1,075	$	909	$	2,998
Gross realized losses	(2,840)		(678)		(5,411)		(1,118)
Net realized (losses) gains on available-for-sale securities	(2,422)		397		(4,502)		1,880
Equity securities	(7,902)		2,371		(13,103)		1,692
Miscellaneous	0		1		2		1
Net realized and unrealized investment (losses) gains	$	(10,324)	$	2,769	$	(17,603)	$	3,573

The portion of net unrealized gains and losses recognized during the reporting period related to equity securities held at the reporting date is calculated as follows:


	Three months ended June 30,				Six months ended June 30,
(in thousands)	2022		2021		2022		2021
Equity securities:
Net (losses) gains recognized during the period	$	(7,902)	$	2,371	$	(13,103)	$	1,692
Less: net (losses) gains recognized on securities sold	(51)		128		(409)		(293)
Net unrealized (losses) gains recognized on securities held at reporting date	$	(7,851)	$	2,243	$	(12,694)	$	1,985

Net impairment (losses) recoveries recognized in earnings

Impairments on available-for-sale securities were as follows:


	Three months ended June 30,				Six months ended June 30,
(in thousands)	2022		2021		2022		2021
Available-for-sale securities:
Intent to sell	$	(31)	$	—	$	(101)	$	—
Credit (impaired) recovered	(7)		(1)		(153)		86


Net impairment (losses) recoveries recognized in earnings	$	(38)	$	(1)	$	(254)	$	86