v3.25.1
Fair Value Measurements
 3 Months Ended
Mar. 31, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
FASB Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures, establishes a three-level hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the assets or liabilities fall within different levels of the hierarchy, the classification is based on the lowest level input that is significant to the fair value measurement of the asset or liability.

Classification of assets and liabilities within the hierarchy considers the markets in which the assets and liabilities are traded and the reliability and transparency of the assumptions used to determine fair value. The hierarchy requires the use of observable market data when available. The levels of the hierarchy are defined as follows:

•Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities traded in active markets.
•Level 2 – Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and market-corroborated inputs.
•Level 3 – Inputs to the valuation methodology are unobservable for the asset or liability and are significant to the fair value measurement.

In accordance with ASC 820, the Company determines fair value based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods, including the market, income and cost approaches. The Company uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The following section describes the valuation methodologies used by the Company to measure assets and liabilities at fair value, including an indication of the level within the fair value hierarchy in which each asset or liability is generally classified.
Available-for-sale investments and equity securities. Available-for-sale investments and equity securities are recorded at fair value on a recurring basis. Available-for-sale investments include fixed maturity securities and short-term investments. Fair value is determined by the Company after considering various sources of information, including information provided by a third-party pricing service. The pricing service provides prices for substantially all of the Company's fixed maturity securities and equity securities. In determining fair value, the Company generally does not adjust the prices obtained from the pricing service. The Company obtains an understanding of the pricing service's valuation methodologies and related inputs, which include, but are not limited to, reported trades, benchmark yields, issuer spreads, bids, offers, duration, credit ratings, estimated cash flows and prepayment speeds. The Company validates prices provided by the pricing service by reviewing prices from other pricing sources and analyzing pricing data in certain instances.

The Company has evaluated the various types of securities in its investment portfolio to determine an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs. Level 1 investments include those traded on an active exchange, such as the New York Stock Exchange. Level 2 investments include U.S. Treasury securities, U.S. government-sponsored enterprises, municipal bonds, foreign government, agency, and supranational bonds, mortgage-backed securities and corporate and university debt securities. Level 3 investments include the Company's investments in insurance-linked securities funds that are in run-off, which are not traded on an active exchange and are valued using unobservable inputs.

Fair value for available-for-sale investments and equity securities is measured based upon quoted prices in active markets, if available. Due to variations in trading volumes and the lack of quoted market prices, fixed maturity securities are classified as Level 2 investments. The fair value of fixed maturity securities is normally derived through recent reported trades for identical or similar securities, making adjustments through the reporting date based upon available market observable data previously described. If there are no recent reported trades, the fair value of fixed maturity securities may be derived through the use of matrix pricing or model processes, where future cash flow expectations are developed based upon collateral performance and discounted at an estimated market rate. Significant inputs used to determine the fair value of obligations of states, municipalities and political subdivisions, corporate and university bonds and obligations of foreign governments, agencies and supranationals include reported trades, benchmark yields, issuer spreads, bids, offers, credit information and estimated cash flows. Significant inputs used to determine the fair value of mortgage-backed securities include the type of underlying assets, benchmark yields, prepayment speeds, collateral information, tranche type and volatility, estimated cash flows, credit information, default rates, recovery rates, issuer spreads and the year of issue.

Senior long-term debt and other debt. Senior long-term debt and other debt is carried at amortized cost with the estimated fair value disclosed on the consolidated balance sheets. Senior long-term debt and other debt is classified as Level 2 within the fair value hierarchy due to variations in trading volumes and the lack of quoted market prices. The Company determines fair value through a third-party pricing service and generally does not adjust the prices obtained from the pricing service. The Company obtains an understanding of the pricing service's valuation methodologies and related inputs, which include, but are not limited to, reported trades, benchmark yields, issuer spreads, bids, offers, duration, credit ratings and estimated cash flows.
The following tables present the balances of assets measured at fair value on a recurring basis by level within the fair value hierarchy.

March 31, 2025
(dollars in thousands)Level 1Level 2Level 3Total
Assets:
Investments:
Fixed maturity securities, available-for-sale:
U.S. Treasury securities$— $5,263,681 $— $5,263,681 
U.S. government-sponsored enterprises— 1,429,318 — 1,429,318 
Obligations of states, municipalities and political subdivisions— 3,639,372 — 3,639,372 
Foreign governments, agencies and supranationals
— 2,932,803 — 2,932,803 
Agency mortgage-backed securities
— 2,698,872 — 2,698,872 
Non-agency mortgage-backed securities
— 101,954 — 101,954 
Corporate and university bonds
— 211,629 — 211,629 
Total fixed maturity securities, available-for-sale— 16,277,629 — 16,277,629 
Equity securities:
Insurance, banks and other financial institutions5,116,230 — — 5,116,230 
Industrial, consumer and all other6,581,413 — — 6,581,413 
Total equity securities11,697,643 — — 11,697,643 
Short-term investments, available-for-sale1,949,450 149,583 — 2,099,033 
Total investments$13,647,093 $16,427,212 $— $30,074,305 

December 31, 2024
(dollars in thousands)Level 1Level 2Level 3Total
Assets:
Investments:
Fixed maturity securities, available-for-sale:
U.S. Treasury securities$— $5,087,858 $— $5,087,858 
U.S. government-sponsored enterprises— 1,346,236 — 1,346,236 
Obligations of states, municipalities and political subdivisions— 3,619,492 — 3,619,492 
Foreign governments, agencies and supranationals
— 2,706,523 — 2,706,523 
Agency mortgage-backed securities
— 2,649,813 — 2,649,813 
Non-agency mortgage-backed securities
— 118,030 — 118,030 
Corporate and university bonds
— 217,587 — 217,587 
Total fixed maturity securities, available-for-sale— 15,745,539 — 15,745,539 
Equity securities:
Insurance, banks and other financial institutions4,968,736 — 1,384 4,970,120 
Industrial, consumer and all other6,814,401 — — 6,814,401 
Total equity securities11,783,137 — 1,384 11,784,521 
Short-term investments, available-for-sale2,363,736 161,174 — 2,524,910 
Total investments$14,146,873 $15,906,713 $1,384 $30,054,970 

Except as disclosed in note 3, the Company did not have any assets or liabilities measured at fair value on a non-recurring basis during the three months ended March 31, 2025 and 2024.