Investment income and net realized and unrealized gains

12 Months Ended

Dec. 31, 2023

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:

	2023	2022
	(in $ thousands)
Investments in:
Debt securities	610,236	611,934
Equity securities	69,700	98,149
	679,936	710,083

As of December 31, 2023 and 2022, included in the above fair values of investments in equity securities were net unrealized investment gains of $11.2 million and $19.2 million, respectively.

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

	2023		2022
	Amortized costs	Fair values	Amortized costs	Fair values
	(in $ thousands)
Municipal	22,201	22,031	30,104	29,835
Corporate	242,656	231,474	272,362	254,316
Foreign	332,723	323,391	315,184	299,137
U.S. Treasury Bonds	33,714	33,340	29,078	28,646
	631,294	610,236	646,728	611,934

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 $282.4 million and $261.8 million as of December 31, 2023 and 2022, respectively, and United Kingdom treasury and corporate bonds with aggregate fair values of $31.7 million and $28.0 million as of December 31, 2023 and 2022, respectively.

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

	2023		2022
	Gains	Losses	Gains	Losses
	(in $ thousands)
Municipal	—	170	3	272
Corporate	764	11,946	489	18,535
Foreign	1,765	11,097	165	16,212
U.S. Treasury Bonds	106	480	21	453
	2,635	23,693	678	35,472

Debt securities at December 31, 2023 mature, according to their contractual terms, as follows (actual maturities may differ due to call or prepayment rights):

	Amortized costs	Fair values
	(in $ thousands)
In one year or less	101,047	99,855
After one year through five years	344,370	330,077
After five years through ten years	173,408	168,804
After ten years	12,469	11,500
	631,294	610,236

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, 2023, were:

	Less than 12 months		More than 12 months		Total
	Losses	Fair values	Losses	Fair values	Losses	Fair values
	(in $ thousands)
Municipal	50	13,022	120	8,383	170	21,405
Corporate	68	4,808	11,878	208,971	11,946	213,779
Foreign	472	31,918	10,625	216,135	11,097	248,053
U.S. Treasury Bonds	327	20,895	153	4,815	480	25,710
	917	70,643	22,776	438,304	23,693	508,947

The number of specific debt securities investment holdings in an unrealized loss position as of December 31, 2023 was 321. Of these securities, 261 were in unrealized loss positions for more than 12 months. Gross unrealized investment losses at December 31, 2023 decreased compared to December 31, 2022, primarily due to the gradual market recovery influenced by the pause in government-initiated interest rate hikes during the second half of 2023 and expectations of future interest rate reductions. Since the Company does not intend to sell and will more likely than not maintain each investment security until its maturity or anticipated recovery, and no significant credit risk is deemed to exist, these investments are not considered as credit-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, 2022, were:

	Less than 12 months		More than 12 months		Total
	Losses	Fair values	Losses	Fair values	Losses	Fair values
	(in $ thousands)
Municipal	262	27,491	10	67	272	27,558
Corporate	12,935	193,239	5,600	44,342	18,535	237,581
Foreign	7,608	186,221	8,604	101,294	16,212	287,515
U.S. Treasury Bonds	413	25,102	40	445	453	25,547
	21,218	432,053	14,254	146,148	35,472	578,201

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

	2023	2022	2021
	(in $ thousands)
Investment income:
Debt securities	16,274	14,483	13,313
Equity securities, short-term investments, cash equivalents and other	28,861	7,938	3,542
	45,135	22,421	16,855
Net realized and unrealized (losses) gains:
Realized gains	3,407	6,212	13,015
Realized losses	(5,510)	(5,142)	(6,414)
Net unrealized investment gains (losses) recognized on equity securities still held	2,069	(2,546)	17,720
	(34)	(1,476)	24,321

In 2023, net realized and unrealized losses included a $3.2 million contingent receivable loss adjustment related to a previous disposition of a business and $0.9 million of net gains resulting from contingent liability adjustments related to two title company acquisitions. Total investment income in 2023 was significantly higher compared to 2022 and 2021, primarily due to higher interest income resulting from earned interest from eligible escrow balances and increased interest rates in 2023.

In 2022, net realized and unrealized losses included $2.6 million of gains from settlements of company-owned insurance policies, a $1.0 million gain from an acquisition contingent liability adjustment and a $1.0 million realized gain related to a sale of a title plant copy, partially offset by $3.6 million of realized losses from disposals of businesses.

In 2021, net realized and unrealized gains included $6.1 million of net realized gains from sale of buildings and other fixed assets and $3.8 million of net gains from acquisition contingent liability adjustments, partially offset by $2.7 million of net realized losses related to disposals of equity method investments.

Net investment gains and losses recognized for the years ended December 31 related to investments in equity securities are follows:

	2023	2022	2021
	(in $ thousands)
Total net investment gains (losses) recognized on equity securities during the period	3,044	(2,151)	19,351
Less: Net realized gains on equity securities sold during the period	975	395	1,631
Net unrealized investment gains (losses) recognized on equity securities still held at December 31	2,069	(2,546)	17,720

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

	2023	2022	2021
	(in $ thousands)
Proceeds from sales of debt securities	21,909	65,827	68,450
Proceeds from sales of equity securities	38,548	868	843
Total proceeds from sales of investments in securities	60,457	66,695	69,293