Investment income and net realized and unrealized gains

12 Months Ended

Dec. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Investment income and net realized and unrealized gains

Investments in debt and equity securities. The total fair values of the Company's investments in debt and equity securities as of December 31 are detailed below:

	2019	2018
	($000 omitted)
Investments in:
Debt securities	605,721	602,020
Equity securities	39,318	33,997
	645,039	636,017

As of December 31, 2019 and 2018, included in the above fair values of investments in equity securities were net unrealized investment gains of $6.9 million and $2.9 million, respectively.

The amortized costs and fair values of investments in debt securities as of December 31, are as follows:

	2019		2018
	Amortized costs	Fair values	Amortized costs	Fair values
	($000 omitted)
Municipal	52,176	53,823	61,779	61,934
Corporate	299,074	309,142	333,289	328,495
Foreign	234,734	236,073	200,667	198,938
U.S. Treasury Bonds	6,664	6,683	12,951	12,653
	592,648	605,721	608,686	602,020

The Company believes its investment portfolio is diversified and expects no material loss to result from the failure to perform by issuers of the debt securities it holds. Investments made by the Company are not collateralized. Foreign debt securities primarily include Canadian government and corporate bonds, with aggregate fair values of $206.5 million and $171.2 million as of December 31, 2019 and 2018, respectively, and United Kingdom treasury and corporate bonds with aggregate fair values of $24.1 million and $23.0 million as of December 31, 2019 and 2018, respectively.

Gross unrealized gains and losses on investments in debt securities at December 31, were:

	2019		2018
	Gains	Losses	Gains	Losses
	($000 omitted)
Municipal	1,649	2	482	327
Corporate	10,091	23	1,894	6,688
Foreign	2,362	1,023	1,402	3,131
U.S. Treasury Bonds	60	41	2	300
	14,162	1,089	3,780	10,446

Debt securities at December 31, 2019 mature, according to their contractual terms, as follows (actual maturities may differ due to call or prepayment rights):

	Amortized costs	Fair values
	($000 omitted)
In one year or less	68,377	68,517
After one year through five years	336,402	341,773
After five years through ten years	157,147	162,778
After ten years	30,722	32,653
	592,648	605,721

Gross unrealized losses on investments in debt securities and the fair values of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2019, were:

	Less than 12 months		More than 12 months		Total
	Losses	Fair values	Losses	Fair values	Losses	Fair values
	($000 omitted)
Municipal	2	53	—	—	2	53
Corporate	23	7,420	—	—	23	7,420
Foreign	318	92,108	705	55,875	1,023	147,983
U.S. Treasury Bonds	—	—	41	2,215	41	2,215
	343	99,581	746	58,090	1,089	157,671

The number of specific debt securities investment holdings in an unrealized loss position as of December 31, 2019 was 50. Of these securities, 26 were in unrealized loss positions for more than 12 months. During 2019, the overall gross unrealized losses on debt securities improved compared to the prior year-end, primarily due to reduced interest rates and credit spreads which increased investment fair values. Since the Company does not intend to sell and will more-likely-than-not maintain each investment until its maturity or anticipated recovery, and no significant credit risk is deemed to exist, these investments are not considered as other-than-temporarily-impaired. The Company believes its investment portfolio is diversified and expects no material loss to result from the failure to perform by issuers of the debt securities it holds. Investments made by the Company are not collateralized.

Gross unrealized losses on investments in debt securities and the fair values of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2018, were:

	Less than 12 months		More than 12 months		Total
	Losses	Fair values	Losses	Fair values	Losses	Fair values
	($000 omitted)
Municipal	91	13,366	236	11,645	327	25,011
Corporate	4,416	201,965	2,272	71,044	6,688	273,009
Foreign	158	11,424	2,973	137,793	3,131	149,217
U.S. Treasury Bonds	—	—	300	12,544	300	12,544
	4,665	226,755	5,781	233,026	10,446	459,781

Investment income and net realized and unrealized gains. Income from investments and net realized and unrealized gains for the years ended December 31 are detailed below:

	2019		2018		2017
	($000 omitted)
Investment income:
Debt securities	15,769		17,431		17,222
Short-term investments, cash equivalents and other	4,026		2,306		1,710
	19,795		19,737		18,932
Net realized and unrealized gains:
Realized gains	53,465		2,698		4,997
Realized losses	(14,747	)	(483	)	(2,790	)
Net unrealized investment gains (losses) recognized on equity securities still held	4,042		(2,162	)	—
	42,760		53		2,207

In 2019, net realized and unrealized gains included $50.0 million realized gain related to the merger termination fee paid by FNF (refer to Note 1-S), $4.0 million of net unrealized investment gains on equity securities held at year-end and $2.5 million of realized gains from sales of securities investments, partially offset by $14.7 million of impairment expenses primarily related to title plants, buildings, intangible assets, equity-method investments and other assets (refer to Notes 1-K, 8 and 9).

In 2018, net realized and unrealized gains included $1.3 million of realized gains from sales of equity investments with no previously readily determinable fair values and $2.2 million of net unrealized investment losses on equity securities held at year-end.

In 2017, net realized gains included $3.2 million of net realized gains from the sale of securities investments, partially offset by $0.8 million of net realized loss due to an increase in the fair value of a contingent consideration liability related to a prior acquisition.

Net investment gains and losses recognized in 2019 and 2018 related to investments in equity securities (refer to Note 1-H) are calculated as follows:

	2019	2018
	($000 omitted)
Total net investment gains (losses) recognized on equity securities during the period	4,825	(2,538	)
Less: Net realized gains (losses) on equity securities sold during the period	783	(376	)
Net unrealized investment gains (losses) recognized on equity securities still held	4,042	(2,162	)

Proceeds from sales of investments in securities for the years ended December 31 are as follows:

	2019	2018	2017
	($000 omitted)
Proceeds from sales of debt securities	46,834	43,556	68,649
Proceeds from sales of equity securities	3,771	5,886	8,293
Total proceeds from sales of investments in securities	50,605	49,442	76,942