v3.26.1
Fair Value Measurements
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The Company’s financial instruments include assets and liabilities carried at fair value, as well as assets and liabilities carried at cost or amortized cost but disclosed at fair value in its consolidated financial statements. In determining fair value, the market approach is generally applied, which uses prices and other relevant data based on market transactions involving identical or comparable assets and liabilities.
The Company uses data primarily provided by third-party investment managers or pricing vendors to determine the fair value of its investments. Periodic analyses are performed on prices received from third parties to determine whether the prices are reasonable estimates of fair value. The analyses include a review of month-to-month price fluctuations and, as needed, a comparison of pricing services’ valuations to other pricing services’ valuations for the identical security.
The Company classifies its financial instruments into the following three-level hierarchy:
Level 1 - Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement
date.
Level 2 - Inputs are other than quoted prices included in Level 1 that are observable for the asset or liability through
corroboration with market data at the measurement date.
Level 3 - Unobservable inputs that reflect management’s best estimate of what market participants would use in
pricing the asset or liability at the measurement date.
The following methods and assumptions were used in estimating the fair value disclosures for financial instruments in the accompanying consolidated financial statements and in these notes:
U.S. government securities, mutual funds and common stock
The Company uses unadjusted quoted prices for identical instruments in an active exchange to measure fair value which represent Level 1 inputs.
Preferred stocks, municipal securities, corporate securities and miscellaneous
The Company uses a pricing model that utilizes market-based inputs such as trades in an illiquid market for a particular security or trades in active markets for securities with similar characteristics. The model considers other inputs such as benchmark yields, issuer spreads, security terms and conditions, and other market data. These represent Level 2 fair value inputs.
Commercial mortgage-backed securities, residential mortgage-backed securities and other asset-backed securities
The Company uses a pricing model that utilizes market-based inputs that may include dealer quotes, market spreads, and yield curves. It may evaluate individual tranches in a security by determining cash flows using the security’s terms and conditions, collateral performance, credit information benchmark yields and estimated prepayments. These represent Level 2 fair value inputs.
Fixed maturity securities, available for sale classified as Level 3
The Company has corporate securities and miscellaneous, other asset-backed securities that are managed by an independent asset manager and priced by an independent pricing provider. The provider estimates the value of the securities using the discount net present value of cash flows method using an unobservable discount rate. The discount rate spread represents the risk associated with future cash flows, including inflation, opportunity cost and the time value of money. This rate represents Level 3 fair value inputs.
The following table sets forth the range of the discount rate as of March 31, 2026 and December 31, 2025:
March 31, 2026December 31, 2025
High11.35 %11.10 %
Low4.66 %4.25 %
Weighted average6.73 %6.40 %
Mortgage loans
Mortgage loans have variable interest rates and are collateralized by real property. The Company determines fair value of mortgage loans using the income approach utilizing inputs that are observable and unobservable (Level 3). The unobservable input consists of the spread applied to a prime rate used to discount cash flows. The spread represents the incremental cost of capital based on the borrower’s ability to make future payments and the value of the collateral relative to the loan balance and is subject to judgment and uncertainty.
The following table sets forth the range and weighted average, weighted by relative fair value, of the spread as of March 31, 2026 and December 31, 2025:
March 31, 2026December 31, 2025
High8.09 %8.34 %
Low6.54 %6.55 %
Weighted average7.67 %7.74 %
Derivatives
Included in other assets are derivatives which consist of certain exchange traded options contracts entered into by the Company. The fair values of these options are measured using quoted prices in active markets on the relevant exchange, specifically utilizing either the volume-weighted average price of trades in similar contracts during a specified time window, or the last trade settlement price when no trades occur within that period. This method represents Level 1 inputs.
The following tables set forth the Company’s investments and derivatives within the fair value hierarchy at March 31, 2026 and December 31, 2025:
March 31, 2026
($ in thousands)Level 1Level 2Level 3Total
Fixed maturity securities, available-for-sale:
U.S. government securities$159,548 $— $— $159,548 
Non U.S government securities— 2,671 — 2,671 
Corporate securities and miscellaneous— 658,638 141,847 800,485 
Municipal securities— 95,629 — 95,629 
Residential mortgage-backed securities— 471,175 — 471,175 
Commercial mortgage-backed securities— 79,672 — 79,672 
Other asset-backed securities— 568,324 17,603 585,927 
Total fixed maturity securities, available-for-sale159,548 1,876,109 159,450 2,195,107 
Fixed maturity securities, held-to-maturity:
Other asset-backed securities— — 34,290 34,290 
Total fixed maturity securities, held-to-maturity— — 34,290 34,290 
Equity securities:
Preferred stocks— 1,140 — 1,140 
Total equity securities— 1,140 — 1,140 
Mortgage loans— — 9,088 9,088 
Short-term investments386,514 — — 386,514 
Derivatives24,401 — — 24,401 
Total$570,463 $1,877,249 $202,828 $2,650,540 
December 31, 2025
($ in thousands)Level 1Level 2Level 3Total
Fixed maturity securities, available-for-sale:
U.S. government securities$44,468 $— $— $44,468 
Corporate securities and miscellaneous— 503,274 133,113 636,387 
Municipal securities— 102,116 — 102,116 
Residential mortgage-backed securities— 486,587 — 486,587 
Commercial mortgage-backed securities— 73,050 — 73,050 
Other asset-backed securities— 495,891 17,804 513,695 
Total fixed maturity securities, available-for-sale44,468 1,660,918 150,917 1,856,303 
Fixed maturity securities, held-to-maturity:
Other asset-backed securities— — 33,603 33,603 
Total fixed maturity securities, held-to-maturity:— — 33,603 33,603 
Equity securities:
Preferred stocks— 1,174 — 1,174 
Total equity securities— 1,174 — 1,174 
Mortgage loans— — 9,902 9,902 
Short-term investments264,299 — — 264,299 
Derivatives34,857 — — 34,857 
Total$343,624 $1,662,092 $194,422 $2,200,138 
The following tables set forth the changes in the fair value of instruments carried at fair value with a Level 3 measurement during the three months ended March 31, 2026 and 2025:
($ in thousands)Fixed Maturity Securities, Available-For-SaleMortgage Loans
Balance at December 31, 2025$150,917 $9,902 
Total losses for the period recognized in net investment gains(62)(814)
Purchases11,266 — 
Sales/Disposals(334)— 
Total unrealized losses for the period recognized in accumulated comprehensive (loss) income(2,337)— 
Balance at March 31, 2026$159,450 $9,088 
($ in thousands)Fixed Maturity Securities, Available-For-SaleMortgage Loans
Balance at December 31, 2024$77,920 $26,490 
Total losses for the period recognized in net investment gains(110)(66)
Issuances— 5 
Settlements— (10,417)
Purchases5,164 — 
Sales/Disposals(199)— 
Total unrealized gains for the period recognized in accumulated comprehensive income (loss)682 — 
Balance at March 31, 2025$83,457 $16,012 
Total losses for the period recognized in net investment gains attributable to the change in unrealized gains or losses relating to assets held as of period end$— $(84)
The transfers into Level 3 during the three months ended March 31, 2026 were the result of securities that began receiving valuations from asset managers that utilized unobservable inputs at the end of the period.
The Company measures certain assets, including investments in indirect loans and loan collateral, equity method investments and other invested assets, at fair value on a nonrecurring basis only when they are deemed to be impaired.
In addition to the preceding disclosures on assets and liabilities recorded at fair value in the consolidated balance sheets, the Company is also required to disclose the fair values of certain other financial instruments for which it is practicable to estimate fair value. Estimated fair value amounts, defined as the quoted market price of a financial instrument, have been determined using available market information and other appropriate valuation methodologies. However, considerable judgments are required in developing the estimates of fair value where quoted market prices are not available. Accordingly, these estimates are not necessarily indicative of the amounts that could be realized in a current market exchange. The use of different market assumptions or estimating methodologies may have an effect on the estimated fair value amounts.
The following methods and assumptions were used in estimating the fair value disclosures of other financial instruments:
Fixed maturity securities, held-to-maturity: Fixed maturity securities, held-to-maturity consists of senior and junior notes with target rates of return. As of March 31, 2026, the Company determined the fair value of these instruments using the income approach utilizing inputs that are unobservable (Level 3).
Investment in RedBird Capital Partners: Included in other long-term investments is an investment in a limited partnership with RedBird Capital Partners, which invests in Bishop Street Underwriters, LLC (“Bishop Street”), a managing general agent (MGA). The investment had a fair value of $47.2 million at March 31, 2026, which was determined using the net asset value. The Company employs procedures to assess the reasonableness of the fair value of the investment including obtaining and reviewing the audited financial statements. The unfunded commitment related to the investment was $18.3 million at March 31, 2026. The Company may sell its interest in the investment with the appropriate prior written notice and approval by the general partner. In accordance with Accounting Standard Codification 820-10, this investment is measured at fair value using the net asset value per share practical expedient and has not been classified in the fair value hierarchy.
Notes payable: The carrying value approximates the estimated fair value for notes payable as the notes payable accrue interest at current market rates plus a spread. The Company determines fair value using the income approach utilizing inputs that are observable (Level 2).
Subordinated debt: Subordinated debt consists of the Unsecured Subordinated Notes, due May 24, 2039 and have a fixed interest rate. The Company determines the fair value of these instruments using the income approach utilizing inputs that are observable (Level 2).
The following table sets forth the Company’s carrying and fair values of notes payable and subordinated debt as of March 31, 2026 and December 31, 2025:
March 31, 2026December 31, 2025
($ in thousands)Carrying
Value		Fair
Value		Carrying
Value		Fair
Value
Notes payable
FHLB Loan$57,000 $57,112 $57,000 $57,458 
Revolving Credit Facility114,500 114,500 114,500 114,500 
Term Loan Facility, net of debt issuance costs294,918 294,207 300,000 300,000 
Notes payable$466,418 $465,819 $471,500 $471,958 
Subordinated debt
Unsecured subordinated notes$19,577 $20,395 $19,569 $21,020 
Subordinated debt, net of debt issuance costs$19,577 $20,395 $19,569 $21,020 
Other financial instruments qualify as insurance-related products and are specifically exempted from fair value disclosure requirements.