v3.26.1
Valuation of Financial Instruments
 6 Months Ended
Jun. 30, 2026
Fair Value of Financial Instruments [Abstract]  
Fair Value of Financial Instruments Valuation of Financial Instruments
Financial Instruments Carried at Fair Value
The carrying value and the estimated fair value of the Company’s financial instruments at fair value were as follows:
June 30, 2026December 31, 2025
 Carrying ValueEstimated Fair ValueCarrying ValueEstimated Fair Value
 (in millions)
Financial assets  
Total investments at fair value$2,231.1 $2,231.1 $2,234.8 $2,234.8 
Cash and cash equivalents113.3 113.3 159.8 159.8 
Restricted cash and cash equivalents0.2 0.2 0.2 0.2 
Financial liabilities  
Credit agreement (Note 10)
$20.0 $20.0 $— $— 
FHLB advances (Note 10)
105.0 103.5 35.0 35.0 
Assets and liabilities recorded at fair value on the Company’s Consolidated Balance Sheets are categorized based upon the levels of judgment associated with the inputs used to measure their fair value. Level inputs are defined as follows:
•Level 1 - Inputs are unadjusted quoted market prices for identical assets or liabilities in active markets at the measurement date.
•Level 2 - Inputs other than Level 1 prices that are observable for similar assets or liabilities through corroboration with market data at the measurement date.
•Level 3 - Inputs that are unobservable that reflect management’s best estimate of what willing market participants would use in pricing the assets or liabilities at the measurement date.
The Company uses third party pricing services to assist with its investment accounting function. The ultimate pricing source varies depending on the investment security and pricing service used, but investment securities valued on the basis of observable inputs (Levels 1 and 2) are generally assigned values on the basis of actual transactions. Securities valued on the basis of pricing models with significant unobservable inputs or non-binding broker quotes are classified as Level 3. Transfers between levels of the fair value hierarchy are recognized as of the date of the event or change in circumstances that caused the transfer. The Company performs quarterly analyses on the prices it receives from third parties to determine whether the prices are reasonable estimates of fair value, including confirming the fair values of these securities through observable market prices using an alternative pricing source, as it is ultimately management’s responsibility to ensure that the fair values reflected in the Company’s consolidated financial statements are appropriate. If differences are noted in these analyses, the Company may obtain additional information from other pricing services to validate the quoted price.
The Company bases all of its estimates of fair value for assets on bid prices, when available, as they represent what a third-party market participant would be willing to pay in an arm’s length transaction.
For securities not actively traded, third party pricing services may use quoted market prices of similar instruments or discounted cash flow analyses, incorporating inputs that are currently observable in the markets for similar securities. Inputs that are often used in the valuation methodologies include, but are not limited to, broker quotes, benchmark yields, credit spreads, default rates, and prepayment speed assumptions. There were no material adjustments to the valuation methodology utilized by third party pricing services as of June 30, 2026 and December 31, 2025.
These methods of valuation only produce an estimate of fair value if there is objectively verifiable information to produce a valuation. If objectively verifiable information is not available, the Company would be required to produce an estimate of fair value using some of the same methodologies, making assumptions for market-based inputs that are unavailable.
As of June 30, 2026, the Company's insurance subsidiaries had aggregate Federal Home Loan Bank of San Francisco (FHLB) advances outstanding totaling $105.0 million, bearing fixed interest rates ranging from 3.74% to 3.87% and maturing between February 2029 and May 2029. The estimated fair value of FHLB advances is determined using a discounted cash flow methodology incorporating current FHLB advance rates for instruments of comparable remaining terms as of the measurement date. FHLB advances are classified as Level 2 within the fair value hierarchy as these advances are not actively traded (See Note 10).
As of June 30, 2026, the Company held $80.1 million of fixed maturity securities at fair value that were designated Level 3. These private placement securities were designated as Level 3 securities due to the limited amount of observable market information available.
The following table presents the Company’s investments at fair value and the corresponding fair value measurements.
June 30, 2026December 31, 2025
Level 1Level 2Level 3Level 1Level 2Level 3
(in millions)
Fixed maturity securities:
U.S. Treasuries$— $80.9 $— $— $80.1 $— 
States and municipalities— 151.7 — — 159.9 — 
Corporate securities— 637.8 65.0 — 600.8 54.5 
Residential mortgage-backed securities
— 745.3 2.9 — 799.9 3.0 
Commercial mortgage-backed securities
— 30.0 — — 28.9 — 
Asset-backed securities— 156.1 10.2 — 150.3 12.8 
Collateralized loan obligations— 2.5 — — 12.5 — 
Foreign government securities— — 2.0 — — 2.0 
Other securities
— 153.5 — — 136.0 — 
Total fixed maturity securities$— $1,957.8 $80.1 $— $1,968.4 $72.3 
Equity securities at fair value:
Industrial and miscellaneous$149.1 $— $— $157.9 $— $— 
Other22.4 — — 26.1 — — 
Total equity securities at fair value$171.5 $— $— $184.0 $— $— 
Short-term investments$— $21.7 $— $— $10.1 $— 
Total investments at fair value$171.5 $1,979.5 $80.1 $184.0 $1,978.5 $72.3 

The following table provides a reconciliation of the beginning and ending balances that are measured using Level 3 inputs.
Six Months Ended
June 30,
20262025
(in millions)
Balance at the beginning of the period
$72.3 $65.6 
Purchases
11.5 3.0 
Sales(2.5)(1.1)
Unrealized (losses) gains included in comprehensive income or loss
(1.2)1.1 
Balance at end of period$80.1 $68.6 
Financial Instruments Carried at Cost
Each of the Company's insurance subsidiaries are members of the FHLB. Members are required to purchase a designated amount of FHLB capital stock to maintain their membership in addition to maintaining collateral deposits that back any funds advanced and standby letters of credit issued (See Note 10). The Company’s investment in FHLB stock is recorded at cost, which approximates fair value, as purchases and sales of these securities are at par value with the issuer. FHLB stock is considered a restricted security and is periodically evaluated by the Company for impairment based on the estimated ultimate recovery of par value.
As of June 30, 2026, the Company had $20.0 million outstanding under its Credit Agreement (as amended, as described in Note 10, the Credit Agreement) with Wells Fargo Bank, National Association. Borrowings under the Credit Agreement bear interest at a variable rate based on Adjusted Term Secured Overnight Financing Rate (SOFR), which resets periodically to reflect current market conditions. As a result of the variable rate nature of this instrument, the carrying value approximates its estimated fair value as of June 30, 2026. The revolving credit facility is classified as Level 2 within the fair value hierarchy (See Note 10).
Financial Instruments Carried at Net Asset Value
The Company has investments in private equity limited partnership interests that are included in Other invested assets on the Company’s Consolidated Balance Sheets. These investments do not have readily determinable fair values and are carried at net asset value (NAV) and therefore are excluded from the fair value hierarchy. The Company initially estimates the value of these investments using the transaction price. In subsequent periods, the Company measures these investments using NAV per share provided quarterly by the general partner, based on financial statements that are audited annually. These investments are generally not redeemable by the investees and cannot be sold without approval of the general partner. These investments have a fund term of 3 to 12 years, subject to two or three one-year extensions at the general partner’s discretion. The Company periodically receives and recognizes as Net investment income on the Company’s Consolidated Statements of Comprehensive Income (Loss) distributions of proceeds from dividends and interest from fund investments, as well as from any dispositions of fund investments during the course of the fund term. As of June 30, 2026, the Company had unfunded commitments to these private equity limited partnerships totaling $9.7 million.
Additionally, certain cash equivalents, principally money market securities, are measured using NAV, which approximates fair value.
The following table presents cash and investments carried at NAV on the Company’s Consolidated Balance Sheets.
June 30, 2026December 31, 2025
(in millions)
Cash equivalents carried at NAV$59.0 $110.9 
Other invested assets carried at NAV96.1 96.5