0001519449-23-000021 | 10-Q | XBRL Viewer | Skyward Specialty Insurance Group INC

Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2023

Premium Receivable, Allowance for Credit Loss

The following table sets forth the changes in the allowance for expected credit losses for the three months ended March 31, 2023.


($ in thousands)	Allowance for Credit Losses
Balance at December 31, 2022	$	629
Cumulative effect of adoption of ASU 2016-13 at January 1, 2023	—
Current period change for estimated uncollectible premiums	409
Write-offs of uncollectible premiums receivable	(56)
Balance at March 31, 2023	$	982

Reinsurance Recoverable, Credit Quality Indicator

A summary of the Company’s reinsurance recoverables net of credit enhancements by A.M. Best rating as of March 31, 2023 was as follows:


A.M. Best Rating	March 31, 2023
A- and above	98.5	%
B++ to B+	1.4

Not rated	0.1

Reinsurance Recoverable, Allowance for Credit Loss

The following table sets forth the changes in the allowance for estimated uncollectible reinsurance for the three months ended March 31, 2023:


($ in thousands)	Allowance for Credit Losses
Balance at December 31, 2022	$	—
Cumulative effect of adoption of ASU 2016-13 at January 1, 2023	2,295
Current period change for estimated uncollectible reinsurance	—

Balance at March 31, 2023	$	2,295

Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Income tax expense	$ 4,166	$ 4,269
Effective tax rate	21.10%	20.70%

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Period of adoption, adjustment	Preferred Stock	Common Stock	Treasury Stock	Additional Paid-in Capital	Stock Notes Receivable	Accumulated Other Comprehensive Loss	Accumulated Deficit	Accumulated Deficit Period of adoption, adjustment
Stockholders' equity beginning balance at Dec. 31, 2021	$ 426,080		$ 20	$ 168	$ (2)	$ 575,159	$ (9,092)	$ 4,640	$ (144,813)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Employee equity transactions	690					502	188
Reclassification of stock notes receivable to other assets	1,942						1,942
Net income	16,311								16,311
Other comprehensive income, net of tax	(16,404)							(16,404)
Stockholders' equity ending balance at Mar. 31, 2022	428,619		20	168	(2)	575,661	(6,962)	(11,764)	(128,502)
Stockholders' equity beginning balance at Dec. 31, 2021	426,080		20	168	(2)	575,159	(9,092)	4,640	(144,813)
Stockholders' equity ending balance at Dec. 31, 2022	$ 421,662		20	168	(2)	577,289	(6,911)	(43,485)	(105,417)	$ (2,300)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Accounting Standards Update [Extensible Enumeration]	Accounting Standards Update 2016-13 [Member]
Employee equity transactions	$ 2,057					1,864	193
Preferred stock conversion to common shares	0		(20)	161	2	(143)
Proceeds from initial public offering, net	62,406			48		62,358
Net income	15,556								15,556
Other comprehensive income, net of tax	7,741							7,741
Stockholders' equity ending balance at Mar. 31, 2023	$ 507,146	$ (2,276)	$ 0	$ 377	$ 0	$ 641,368	$ (6,718)	$ (35,744)	$ (92,137)	$ (2,276)

- Definition

Indicates amendment to accounting standards.

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The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

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+ Details

Investments - Proceeds from Sales (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Investments, Debt and Equity Securities [Abstract]
Fixed maturity securities, available-for sale	$ 8,392	$ 7,575
Equity securities	$ 13,325	$ 11,966

Related Party Transactions

3 Months Ended

Mar. 31, 2023

Related Party Transactions

Westaim

As of March 31, 2023 and December 31, 2022, Westaim and Westaim HIIG LP owned 39.0% and 44.5%, respectively, of the Company’s common stock. The changes in ownership percentage were primarily due to the IPO and conversion of preferred stock to common stock.

The Company’s investment in Westaim is included in equity securities on the consolidated balance sheets. The unrealized loss on this investment as of March 31, 2023 and December 31, 2022 were $1.5 million and $2.3 million, respectively.

Prior to the closing of the IPO, Westaim performed consulting and certain other services for the Company pursuant to a Management Services Agreement. This agreement terminated pursuant to its terms upon the closing of the IPO.

RISCOM

RISCOM provides the Company with wholesale brokerage services. RISCOM and the Company also have a managing general agency agreement. The Company holds a 20% ownership interest in RISCOM.

Net earned premium and gross commission expense related to these agreements for the three months ended March 31, 2023 and 2022 were as follows:



($ in thousands)	2023		2022
Net earned premium	$	22,185	$	21,018
Commissions	6,853		7,348

Premiums receivable as of March 31, 2023 and December 31, 2022 were $17.6 million and $9.9 million, respectively.

Reinsurance

The Company has reinsurance agreements with Everest Re, an affiliate of Mt. Whitney Securities, LLC, which was a limited partner of Westaim HIIG LP through November 30, 2022, and holder of preferred shares. During the three months ended March 31, 2023, Mt. Whitney Securities divested their entire ownership of the Company’s equity securities. Reinsurance premiums ceded during the three months ended March 31, 2022 related to the agreement were $19.6 million. Reinsurance recoverable from Everest Re, net of premium payables at December 31, 2022 were $177.5 million.

Other

Advisory and professional services fees and expense reimbursements paid to various affiliated shareholders and directors for the three months ended March 31, 2023 and 2022 were $2.1 million and $0.7 million, respectively.

See Note 4 and 5 for investments involving affiliated companies and additional related party transactions.

Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Numerator
Net income	$ 15,556	$ 16,311
Less: Undistributed income allocated to participating securities	(1,274)	(7,823)
Net income attributable to common shareholders	14,282	8,488
Add back: Undistributed income allocated to participating securities	1,274	7,823
Net income (numerator for diluted earnings per share under the two-class method)	$ 15,556	$ 16,311
Denominator
Basic (in shares)	32,848,243	16,376,720
Preferred shares (if converted method) (in shares)	2,931,256	15,092,585
Contingently issuable instruments (treasury stock method) (in shares)	708,746	714,185
Diluted weighted-average common share equivalents (in shares)	36,952,073	32,412,307
Basic earnings per share (in dollar per share)	$ 0.43	$ 0.52
Diluted earnings per share (in dollar per share)	$ 0.42	$ 0.50
Market condition awards
Denominator
Awards (in shares)	87,750	40,460
Performance condition awards
Denominator
Awards (in shares)	38,441	32,362
Stock options
Denominator
Awards (in shares)	318,421	155,995
Options (treasury stock method)
Denominator
Awards (in shares)	19,216	0

Commitment and Contingencies	3 Months Ended
Commitment and Contingencies	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Litigation The Company is named as a defendant in various legal actions arising from claims made under insurance policies and contracts. Those actions are considered by the Company in estimating the losses and loss adjustment expense reserves. Also, from time to time, the Company is a defendant in various legal actions that relate to bad faith claims, disputes with third parties or that involve alleged errors and omissions. The Company records accruals for these items to the extent the losses are probable and reasonably estimable. Although the ultimate outcome of these matters cannot be determined at this time, based on present information, the availability of insurance coverage and advice received from outside legal counsel, the Company’s management believes the resolution of any such matters will not, individually or in the aggregate, have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. Indemnification In conjunction with the sale of business assets and subsidiaries, the Company has provided indemnifications to certain of the buyers. Certain indemnifications cover typical representations and warranties related to the responsibilities to perform under the sales contracts. The amount of potential exposure covered by the indemnifications is difficult to determine because the indemnifications cover a variety of matters, operations and scenarios. Certain of these indemnifications have no time limit. At this time, the Company does not have reason to believe any such significant claims exist.

Losses and Loss Adjustment Expenses (Tables)

3 Months Ended

Mar. 31, 2023

Insurance [Abstract]

Schedule of Liability for Unpaid Claims and Claims Adjustment Expense

The following table sets forth the reconciliation of unpaid losses and loss adjustment expenses as reported in the condensed consolidated balance sheets as of and for the three months ended March 31, 2023 and 2022:



($ in thousands)	2023		2022
Reserves for losses and LAE, beginning of period	$	1,141,757	$	979,549
Less: reinsurance recoverable on unpaid claims, beginning of period	(435,986)		(381,338)
Reserves for losses and LAE, beginning of period, net of reinsurance	705,771		598,211
Incurred, net of reinsurance, related to:
Current period	115,142		89,989
Prior years	—		—
Total incurred, net of reinsurance	115,142		89,989
Paid, net of reinsurance, related to:
Current period	8,744		10,605
Prior years	68,745		62,959
Total paid	77,489		73,564
Net reserves for losses and LAE, end of period	743,424		614,636
Plus: reinsurance recoverable on unpaid claims, end of period	429,752		385,146
Reserves for losses and LAE, end of period	$	1,173,176	$	999,782

Notes Payable - Narrative (Details) - Revolving credit facility - Line of Credit	3 Months Ended
	Mar. 31, 2023 USD ($)
Revolving credit facility
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 150,000,000
Accordion feature, increase limit	50,000,000
Proceeds from long-term debt	50,000,000
Letter of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 30,000,000
Secured Overnight Financing Rate (SOFR) \| Revolving credit facility \| Low
Debt Instrument [Line Items]
Basis spread on variable rate	1.50%
Secured Overnight Financing Rate (SOFR) \| Revolving credit facility \| High
Debt Instrument [Line Items]
Basis spread on variable rate	1.90%
Credit Spread Adjustment \| Revolving credit facility \| Low
Debt Instrument [Line Items]
Basis spread on variable rate	0.10%

Stock Based Compensation - Summary of Equity Awards (Details) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Jan. 12, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Authorized target common shares (in shares)			3,200,516
Long Term Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Authorized target common shares (in shares)	1,833,484	191,691
Market condition awards \| Long Term Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Requisite Service Period	3 years	3 years
Authorized target common shares (in shares)	37,622	28,495
Market condition awards \| Low \| Long Term Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Award Payout Range	0.00%	0.00%
Market condition awards \| High \| Long Term Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Award Payout Range	150.00%	150.00%
Performance condition awards \| Long Term Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Requisite Service Period	3 years	3 years
Authorized target common shares (in shares)	91,350	26,214
Performance condition awards \| Low \| Long Term Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Award Payout Range	0.00%	0.00%
Performance condition awards \| High \| Long Term Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Award Payout Range	150.00%	150.00%
Service condition awards \| Long Term Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Authorized target common shares (in shares)	944,522	136,982
Service condition awards \| Low \| Long Term Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Requisite Service Period	1 year	1 year
Service condition awards \| High \| Long Term Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Requisite Service Period	4 years	3 years
Options (treasury stock method) \| Long Term Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Authorized target common shares (in shares)	759,990
Options (treasury stock method) \| Low \| Long Term Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Requisite Service Period	3 years
Options (treasury stock method) \| High \| Long Term Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Requisite Service Period	4 years

Related Party Transactions - Resinsurance Transactions (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Related Party Transaction [Line Items]
Ceded premiums earned	$ 118,958	$ 107,506
Reinsurance recoverable for paid and unpaid claims	$ 570,504		$ 581,359
Everest Reinsurance Co \| Reinsurance agreement \| Affiliated entity
Related Party Transaction [Line Items]
Ceded premiums earned		$ 19,600
Reinsurance recoverable for paid and unpaid claims			$ 177,500

Reinsurance - Schedule of Premiums Written and Earned (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Written
Direct premiums	$ 308,213	$ 248,635
Assumed premiums	52,285	34,007
Ceded premiums	(158,357)	(147,241)
Net premiums	202,141	135,401
Earned
Direct premiums	262,658	222,637
Assumed premiums	39,131	26,595
Ceded premiums	(118,958)	(107,506)
Net premiums	182,831	141,726
Ceded losses and LAE incurred	$ 64,794	$ 61,527

Stock Based Compensation (Tables)

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Summary of Equity Awards

The following table sets forth the Company’s equity awards, target payout ranges and authorized target restricted stock and stock units for the three months ended March 31, 2023 and 2022:

Award
Payout Range

Requisite
Service Period

Target
Stock and Stock Units

Three months ended March 31, 2023

Market condition awards

0%–150%

3 years

37,622

Performance condition awards

0%–150%

3 years

91,350

Service condition awards

N/A

1–4 years

944,522

Stock options

N/A

3–4 years

759,990

1,833,484

Three months ended March 31, 2022

Market condition awards

0%–150%

3 years

28,495

Performance condition awards

0%–150%

3 years

26,214

Service condition awards

N/A

1–3 years

136,982

191,691

The following table sets forth option activity for the three months ended March 31, 2023:


	Weighted-Average Exercise Price		Stock
Outstanding at January 1, 2023			—
Granted	$	15.00	759,990
Exercised			—
Forfeited			—
Outstanding at March 31, 2023	$	15.00	759,990

Schedule of Nonvested Share Activity

The following table sets forth the Company’s restricted stock and restricted stock units activity for the three months ended March 31, 2023 and 2022:


	Weighted-Average Grant-Date Fair Value		Stock and Stock Units
Non-vested at January 1, 2023	$	12.55	419,896
Granted	15.85		1,073,494
Vested	12.91		(32,496)
Forfeited	15.10		(7,459)
Non-vested at March 31, 2023	$	14.97	1,453,435

Non-vested at January 1, 2022	$	13.23	375,643
Granted	13.16		191,691
Vested	12.47		(55,851)
Forfeited	$	—	—
Non-vested at March 31, 2022	$	13.28	511,483

Reinsurance (Tables)

3 Months Ended

Mar. 31, 2023

Insurance [Abstract]

Effects of Reinsurance

The following table sets forth the effects of reinsurance on premiums written and earned for the three months ended March 31, 2023 and 2022:



	2023				2022
($ in thousands)	Written		Earned		Written		Earned
Direct premiums	$	308,213	$	262,658	$	248,635	$	222,637
Assumed premiums	52,285		39,131		34,007		26,595
Ceded premiums	(158,357)		(118,958)		(147,241)		(107,506)
Net premiums	$	202,141	$	182,831	$	135,401	$	141,726
Ceded losses and LAE incurred			$	64,794			$	61,527

Ceded Credit Risk

The following table sets forth the components of reinsurance recoverables and ceded unearned premium as of March 31, 2023 and December 31, 2022:


($ in thousands)	March 31, 2023		December 31, 2022
Unpaid losses and loss adjustment expenses ceded	$	429,752	$	435,986
Paid losses and loss adjustment expense ceded	107,463		107,228
Loss portfolio transfer	35,584		38,145
Allowance for credit losses	(2,295)		—
Reinsurance recoverables	$	570,504	$	581,359
Ceded unearned premium	$	197,044	$	157,645

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurement Inputs and Valuation Techniques

The following table sets forth the range and weighted average, weighted by relative fair value, of the spread as of March 31, 2023:



	March 31, 2023
High	9.50	%
Low	2.05	%
Weighted average	5.85	%

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables set forth the Company’s investments within the fair value hierarchy at March 31, 2023 and December 31, 2022:


March 31, 2023
($ in thousands)	Level 1		Level 2		Level 3		Total
Fixed maturity securities, available-for-sale:
U.S. government securities	$	44,918	$	—	$	—	$	44,918
Corporate securities and miscellaneous	—		262,434		—		262,434
Municipal securities	—		67,339		—		67,339
Residential mortgage-backed securities	—		133,890		—		133,890
Commercial mortgage-backed securities	—		52,182		—		52,182
Asset-backed securities	—		112,374		—		112,374
Total fixed maturity securities, available-for-sale	44,918		628,219		—		673,137
Fixed maturity securities, held-to-maturity:
Asset-backed securities	—		—		44,492		44,492
Total fixed maturity securities, held-to-maturity	—		—		44,492		44,492
Common stocks:
Consumer discretionary	1,965		—		—		1,965
Consumer staples	13,116		—		—		13,116
Energy	2,947		—		—		2,947
Finance	19,088		—		—		19,088
Industrial	11,244		—		—		11,244
Information technology	2,912		—		—		2,912
Materials	3,253		—		—		3,253
Other	2,292		—		—		2,292
Total common stocks	56,817		—		—		56,817
Preferred stocks:
Consumer staples			473		—		473
Finance			3,979		—		3,979
Industrial	—		1,135		—		1,135
Other	—		735		—		735
Total preferred stocks	—		6,322		—		6,322
Mutual funds:
Fixed income	5,191		—		—		5,191
Equity	51,615		—		—		51,615
Commodity	520		—		—		520
Total mutual funds	57,326		—		—		57,326
Total equity securities	114,143		6,322		—		120,465
Mortgage loans	—		—		42,335		42,335
Short-term investments	287,351		—		—		287,351
Total investments	$	446,412	$	634,541	$	86,827	$	1,167,780


December 31, 2022
($ in thousands)	Level 1		Level 2		Level 3		Total
Fixed maturity securities, available-for-sale:
U.S. government securities	$	48,541	$	—	$	—	$	48,541
Corporate securities and miscellaneous	—		235,129		—		235,129
Municipal securities	—		57,727		—		57,727
Residential mortgage-backed securities	—		119,856		—		119,856
Commercial mortgage-backed securities	—		36,495		—		36,495
Asset-backed securities	—		109,824		—		109,824
Total fixed maturity securities, available-for-sale	48,541		559,031		—		607,572
Fixed maturity securities, held-to-maturity:
Asset-backed securities	—		—		46,771		46,771
Total fixed maturity securities, held-to-maturity:	—		—		46,771		46,771
Common stocks:
Consumer discretionary	1,948		—		—		1,948
Consumer staples	12,036		—		—		12,036
Energy	3,241		—		—		3,241
Finance	22,636		—		—		22,636
Industrial	9,452		—		—		9,452
Information technology	2,284		—		—		2,284
Materials	2,820		—		—		2,820
Other	1,579		—		—		1,579
Total common stocks	55,996		—		—		55,996
Preferred stocks:
Consumer staples	—		117		—		117
Finance	—		7,085		—		7,085
Industrial	—		1,020		—		1,020
Other	—		549		—		549
Total preferred stocks	—		8,771		—		8,771
Mutual funds:
Fixed income	5,068		—		—		5,068
Equity	49,773		—		—		49,773
Commodity	561		—		—		561
Total mutual funds	55,402		—		—		55,402
Total equity securities	111,398		8,771		—		120,169
Mortgage loans	—		—		52,842		52,842
Short-term investments	121,158		—		—		121,158
Total investments	$	281,097	$	567,802	$	99,613	$	948,512

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The following table sets 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, 2023:


($ in thousands)	Mortgage Loans
Balance at December 31, 2022	$	52,842
Total gains for the period recognized in net investment gains (losses)	$	22
Issuances	$	892
Settlements	(11,421)
Balance at March 31, 2023	$	42,335
Total losses for the period recognized in net investment gains (losses) attributable to the change in unrealized gains or losses relating to assets held as of period end	$	(14)

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The following table sets 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, 2023:


($ in thousands)	Mortgage Loans
Balance at December 31, 2022	$	52,842
Total gains for the period recognized in net investment gains (losses)	$	22
Issuances	$	892
Settlements	(11,421)
Balance at March 31, 2023	$	42,335
Total losses for the period recognized in net investment gains (losses) attributable to the change in unrealized gains or losses relating to assets held as of period end	$	(14)

Summary of Subordinated Debt

The following table sets forth the Company’s carrying and fair values of notes payable and subordinated debt as of March 31, 2023 and December 31, 2022:


	March 31, 2023				December 31, 2022
($ in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Notes Payable
Term loan, due December 31, 2024	$	—	$	—	$	50,000	$	50,000
Revolving credit facility	50,000		50,000		—		—
Notes payable	$	50,000	$	50,000	$	50,000	$	50,000
Subordinated Debt
Junior subordinated interest debentures	$	59,149	$	59,794	$	59,137	$	59,794
Unsecured subordinated notes	19,480		18,622		19,472		18,934
Subordinated debt, net of debt issuance costs	$	78,629	$	78,416	$	78,609	$	78,728

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI https://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 3
-Subparagraph (SX 210.12-04(a))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e24072-122690

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI https://asc.fasb.org/extlink&oid=124435984&loc=d3e28541-108399

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI https://asc.fasb.org/extlink&oid=126973232&loc=d3e21506-112644

Reference 5: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 55
-Paragraph 69B
-URI https://asc.fasb.org/extlink&oid=123466577&loc=SL123495735-112612

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI https://asc.fasb.org/extlink&oid=124435984&loc=d3e28551-108399

Reference 7: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 55
-Paragraph 69E
-URI https://asc.fasb.org/extlink&oid=123466577&loc=SL123495743-112612

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI https://asc.fasb.org/extlink&oid=126973232&loc=d3e21521-112644

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI https://asc.fasb.org/extlink&oid=126973232&loc=d3e21538-112644

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI https://asc.fasb.org/extlink&oid=123599511&loc=d3e64711-112823

Reference 11: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI https://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI https://asc.fasb.org/extlink&oid=126973232&loc=d3e21475-112644

+ Details

Investments - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Investments, Debt and Equity Securities [Abstract]
Fixed maturity securities	$ 9,786	$ (20,764)
Deferred income taxes	(2,045)	4,360
Total other comprehensive income (loss)	$ 7,741	$ (16,404)

Income Taxes (Tables)

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

he Company’s income tax expense and effective tax rates for the three months ended March 31, 2023 and 2022:



($ in thousands	2023			2022
Income tax expense	$	4,166		$	4,269
Effective tax rate	21.1		%	20.7		%

Investments - Narrative (Details)	Mar. 31, 2023 position
Investments, Debt and Equity Securities [Abstract]
Unrealized loss position aged over 12 months, number of positions	551

Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stockholders’ equity (accumulated deficit)	$ 507,146	$ 421,662	$ 428,619	$ 426,080
Period of adoption, adjustment
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stockholders’ equity (accumulated deficit)	$ (2,276)

- Definition

+ References

+ Details

Reinsurance

3 Months Ended

Mar. 31, 2023

Insurance [Abstract]

Reinsurance

Certain premiums and benefits are assumed from and ceded to other insurance companies under various reinsurance agreements. The reinsurance agreements provide the Company with increased capacity to write larger risks and maintain its exposure to loss within its capital resources. The Company remains obligated for amounts ceded in the event that the reinsurers do not meet their obligations.

The following table sets forth the effects of reinsurance on premiums written and earned for the three months ended March 31, 2023 and 2022:



	2023				2022
($ in thousands)	Written		Earned		Written		Earned
Direct premiums	$	308,213	$	262,658	$	248,635	$	222,637
Assumed premiums	52,285		39,131		34,007		26,595
Ceded premiums	(158,357)		(118,958)		(147,241)		(107,506)
Net premiums	$	202,141	$	182,831	$	135,401	$	141,726
Ceded losses and LAE incurred			$	64,794			$	61,527

The following table sets forth the components of reinsurance recoverables and ceded unearned premium as of March 31, 2023 and December 31, 2022:


($ in thousands)	March 31, 2023		December 31, 2022
Unpaid losses and loss adjustment expenses ceded	$	429,752	$	435,986
Paid losses and loss adjustment expense ceded	107,463		107,228
Loss portfolio transfer	35,584		38,145
Allowance for credit losses	(2,295)		—
Reinsurance recoverables	$	570,504	$	581,359
Ceded unearned premium	$	197,044	$	157,645

The Company entered into agreements with several of its reinsurers, whereby the reinsurer established funded trust accounts with the Company as the sole beneficiary. These trust accounts provide the Company additional security to collect claim recoverables under reinsurance contracts and the Company does not carry these on the balance sheet because the Company will only have custody over these accounts upon the failure of the reinsurer to pay amounts due. At March 31, 2023, the market value of these accounts was approximately $127.1 million. The agreements provide that, as was customary in the past, the reinsurer will continue claim payment reimbursements without disturbing the trust balances. The trust amount will be adjusted periodically, by mutual agreement, based on loss reserve recoverables.

Certain ceded reinsurance contracts that transfer only significant timing risk and do not transfer sufficient underwriting risk are accounted for using the deposit method of accounting. The Company’s deposit asset at March 31, 2023 and December 31, 2022 was $36.8 million and $41.8 million, respectively, and was included in other assets on the condensed consolidated balance sheets.

Other Long-Term Investments - Investment in JVN Funds (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Schedule of Equity Method Investments [Line Items]
Recorded investment balance	$ 81,982	$ 86,789
JVM Funds LLC
Schedule of Equity Method Investments [Line Items]
Underlying equity	20,828	21,565
Difference	870	908
Recorded investment balance	$ 21,698	$ 22,473

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Investments:
Fixed maturity securities, available-for-sale, at fair value (amortized cost of $718,395 and $662,616, respectively)	$ 673,137	$ 607,572
Fixed maturity securities, held-to-maturity, at amortized cost (net of allowance for credit losses of $321 as of March 31, 2023)	48,216	52,467
Equity securities, at fair value	120,465	120,169
Mortgage loans (at fair value as of March 31, 2023; at amortized cost as of December 31, 2022)	42,335	51,859
Other long-term investments	118,784	129,142
Short-term investments, at fair value	287,351	121,158
Total investments	1,290,288	1,082,367
Cash and cash equivalents	41,200	45,438
Restricted cash	64,047	79,573
Premiums receivable, net	178,954	139,215
Reinsurance recoverables, net	570,504	581,359
Ceded unearned premium	197,044	157,645
Deferred policy acquisition costs	80,103	68,938
Deferred income taxes	30,572	36,188
Goodwill and intangible assets, net	89,503	89,870
Other assets	79,110	82,846
Total assets	2,621,325	2,363,439
Liabilities:
Reserves for losses and loss adjustment expenses	1,173,176	1,141,757
Unearned premiums	501,218	442,509
Deferred ceding commission	40,824	29,849
Reinsurance and premium payables	185,748	113,696
Funds held for others	44,256	36,858
Accounts payable and accrued liabilities	40,328	48,499
Notes payable	50,000	50,000
Subordinated debt, net of debt issuance costs	78,629	78,609
Total liabilities	2,114,179	1,941,777
Stockholders’ equity
Series A preferred stock, $0.01 par value; 10,000,000 and 2,000,000 shares authorized, 0 and 1,969,660 shares issued and outstanding, respectively	0	20
Common stock, $0.01 par value, 500,000,000 and 168,000,000 shares authorized, 37,658,111 and 16,832,955 shares issued, respectively	377	168
Treasury stock, $0.01 par value, 0 and 233,289 shares, respectively	0	(2)
Additional paid-in capital	641,368	577,289
Stock notes receivable	(6,718)	(6,911)
Accumulated other comprehensive loss	(35,744)	(43,485)
Accumulated deficit	(92,137)	(105,417)
Total stockholders’ equity	507,146	421,662
Total liabilities and stockholders’ equity	$ 2,621,325	$ 2,363,439

Other Long-Term Investments (Tables)

3 Months Ended

Mar. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

Carrying Value of Equity Method Investments

The carrying value of the Company’s equity method investments as of March 31, 2023 and December 31, 2022 were as follows:


($ in thousands)	March 31, 2023		December 31, 2022
Arena SOP LP units	$	6,683	$	8,734
Arena Special Opportunities Fund, LP units	42,701		44,504
Brewer Lane Ventures Fund II LP units	390		200
Dowling Capital Partners LP units	2,231		1,965
Hudson Ventures Fund 2 LP units	3,391		3,551
JVM Funds LLC units	21,698		22,473
RISCOM	4,118		4,037
Universa Black Swan LP units	770		1,325
	$	81,982	$	86,789

The following table sets forth the components of net investment (loss) income from equity method investments for the three months ended March 31, 2023 and 2022:



($ in thousands)	2023		2022
Arena SOP LP units	$	(2,051)	$	6,117
Arena Special Opportunities Fund, LP units	(1,730)		2,804
Dowling Capital Partners LP units	267		514
Hudson Ventures Fund 2 LP units	(255)		64
JVM Funds LLC	(420)		186
RISCOM	81		18
Universa Black Swan LP units	(556)		(493)
	$	(4,664)	$	9,210

The following table sets forth the unfunded commitment of equity method investments as of March 31, 2023 and December 31, 2022:


($ in thousands)	March 31, 2023		December 31, 2022
Brewer Lane Ventures Fund II LP units	$	4,610	$	4,800
Dowling Capital Partners LP units	386		386
Hudson Ventures Fund 2 LP units	1,701		1,796
	$	6,697	$	6,982

The following table sets forth the Company’s recorded investment in RISCOM compared to its share of underlying equity as of March 31, 2023 and December 31, 2022:


($ in thousands)	March 31, 2023		December 31, 2022
Investment in RISCOM:
Underlying equity	$	2,434	$	2,292
Difference	1,684		1,745
Recorded investment balance	$	4,118	$	4,037

The following table sets forth the Company’s recorded investment in JVM Funds LLC compared to its share of underlying equity as of March 31, 2023 and December 31, 2022:


($ in thousands)	March 31, 2023		December 31, 2022
Investment in JVM Funds LLC:
Underlying equity	$	20,828	$	21,565
Difference	870		908
Recorded investment balance	$	21,698	$	22,473

As of March 31, 2023 and December 31, 2022, the Company held indirect investments in collateralized loans and loan collateral through SMA1 and SMA2.

The carrying value and unfunded commitment of the SMA1 and SMA2 as of March 31, 2023 and December 31, 2022 were as follows:


	March 31, 2023				December 31, 2022
($ in thousands)	Carrying Value		Unfunded Commitment		Carrying Value		Unfunded Commitment
SMA1	$	34,654	$	—	$	36,426	$	—
SMA2(1)	(1,652)		—		2,010		—
Investment in indirect loans and loan collateral	$	33,002	$	—	$	38,436	$	—

(1)The carrying value of SMA2 is negative as of March 31, 2023 due to distribution in-transit.

Condensed Consolidated Statements of Cash Flows(Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities
Net income	$ 15,556	$ 16,311
Adjustments to reconcile net income to net cash provided by operating activities	91,651	29,571
Net cash provided by operating activities	107,207	45,882
Cash flows from investing activities:
Purchase of fixed maturity securities, available-for-sale	(72,466)	(23,370)
Purchase of illiquid investments	(286)	(2,376)
Purchase of equity securities	(12,889)	(25,221)
Proceeds from (investment in) direct and indirect loans	14,665	(8,019)
Purchase of property and equipment	(614)	(431)
Sales and maturities of investment securities	34,980	33,935
Distributions from equity method investments	355	1,326
Change in short-term investments	(166,193)	(38,631)
Receivable for securities sold	3,984	5,671
Cash provided by deposit accounting	5,038	1,518
Other, net	0	2
Net cash used in investment activities	(193,426)	(55,596)
Cash flows from financing activities:
Repayment of stock notes receivable	193	186
Draw on revolving line of credit	50,000	0
Repayment of term loan	(50,000)	0
Proceeds from initial public offering	66,262	0
Net cash provided by financing activities	66,455	186
Net decrease in cash and cash equivalents and restricted cash	(19,764)	(9,528)
Cash and cash equivalents and restricted cash at beginning of period	125,011	107,274
Cash and cash equivalents and restricted cash at end of period	105,247	97,746
Supplemental disclosure of cash flow information:
Cash paid for interest	$ 3,145	$ 1,124

Allowance for Credit Losses- Reinsurance Recoverable, Credit Quality Indicator (Details) - Reinsurer concentration risk - Reinsurance recoverable including reinsurance premium paid	3 Months Ended
	Mar. 31, 2023
A- and above
Ceded Credit Risk [Line Items]
Concentration risk, percentage	98.50%
B++ to B+
Ceded Credit Risk [Line Items]
Concentration risk, percentage	1.40%
Not rated
Ceded Credit Risk [Line Items]
Concentration risk, percentage	0.10%

Mortgage Loans

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Mortgage Loans

The Company has invested in Separately Managed Accounts (“SMA1” and “SMA2”), managed by Arena Investors, LP (“Arena”), which is affiliated with The Westaim Corporation (“Westaim”) who, directly and through Westaim HIIG LP (a limited partnership controlled by Westaim), is the Company’s largest shareholder. As of March 31, 2023 and December 31, 2022, the Company held direct investments in mortgage loans from various creditors through SMA1 and SMA2.

The Company’s mortgage loan portfolios are primarily senior loans on real estate across the U.S. The loans earn interest at a fixed rate above a prime rate, mature in approximately 1 to 2 years from loan origination and the principal amounts of the loans range between 40% to 80% property’s appraised value at the time the loans were made. Mortgage loan participations are carried at cost adjusted for unamortized premiums, discounts, and loan fees.

The carrying value of the Company’s mortgage loans as of March 31, 2023 and December 31, 2022 were as follows:


($ in thousands)	March 31, 2023		December 31, 2022
Retail	$	15,568	$	16,516
Industrial	—		6,329
Commercial	16,086		15,309
Multi-family	2,596		5,593
Office	3,210		3,197
Hospitality	4,875		4,915
	$	42,335	$	51,859

The Company’s gross investment income for mortgage loans for the three months ended March 31, 2023 and 2022 were as follows:



($ in thousands)	2023		2022
Retail	$	595	$	359

Commercial	494		210
Multi-family	117		69
Office	106		166

Hospitality	161		14
	$	1,473	$	818

The uncollectible amounts on loans, on an individual loan basis, are determined based upon consultations and advice from the Company’s specialized investment manager and consideration of any adverse situations that could affect the borrower’s ability to repay, the estimated value of underlying collateral, and other relevant factors. The Company writes off the uncollectible amount in the period it was determined to be uncollectible. There was no write-off for uncollectible amounts during the three months ended March 31, 2023 and 2022.

As of March 31, 2023 and December 31, 2022, approximately $0.0 million and $6.4 million of mortgage loans, respectively, were in the process of foreclosure. The carrying value of the mortgage loans in foreclosure is the lower of cost adjusted for unamortized premiums, discounts, and loan fees or the fair value of the collateral less costs to sell.

Losses and Loss Adjustment Expenses - Schedule of Liability for Unpaid Claims and Claims Adjustment Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]
Reserves for losses and LAE, beginning of period	$ 1,141,757	$ 979,549
Less: reinsurance recoverable on unpaid claims, beginning of period	(435,986)	(381,338)
Reserves for losses and LAE, beginning of period, net of reinsurance	705,771	598,211
Incurred, net of reinsurance, related to:
Current period	115,142	89,989
Prior years	0	0
Total incurred, net of reinsurance	115,142	89,989
Paid, net of reinsurance, related to:
Current period	8,744	10,605
Prior years	68,745	62,959
Total paid	77,489	73,564
Net reserves for losses and LAE, end of period	743,424	614,636
Plus: reinsurance recoverable on unpaid claims, end of period	429,752	385,146
Reserves for losses and LAE, end of period	$ 1,173,176	$ 999,782

Related Party Transactions - RISCOM Transactions (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2016	Dec. 31, 2022
Related Party Transaction [Line Items]
Net earned premium	$ 182,831	$ 141,726
Premiums receivable, net	178,954			$ 139,215
Affiliated entity \| Agency agreement \| RISCOM
Related Party Transaction [Line Items]
Agreement, ownership interest			20.00%
Net earned premium	22,185	21,018
Commissions	6,853	$ 7,348
Premiums receivable, net	$ 17,600			$ 9,900

Other Long-Term Investments - Investment in RISCOM (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Equity Method Investment, Difference Between Carrying Amount and Underlying Equity [Abstract]
Recorded investment balance	$ 81,982	$ 86,789
RISCOM
Equity Method Investment, Difference Between Carrying Amount and Underlying Equity [Abstract]
Underlying equity	2,434	2,292
Difference	1,684	1,745
Recorded investment balance	$ 4,118	$ 4,037

Other Long-Term Investments - Net Investment Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Schedule of Equity Method Investments [Line Items]
Net investment income	$ 4,646	$ 15,149
Equity Method Investment, Nonconsolidated Investee or Group of Investees
Schedule of Equity Method Investments [Line Items]
Net investment income	(4,664)	9,210
Arena SOP LP units \| Equity Method Investment, Nonconsolidated Investee or Group of Investees
Schedule of Equity Method Investments [Line Items]
Net investment income	(2,051)	6,117
Arena Special Opportunities Fund, LP units \| Equity Method Investment, Nonconsolidated Investee or Group of Investees
Schedule of Equity Method Investments [Line Items]
Net investment income	(1,730)	2,804
Dowling Capital Partners LP units \| Equity Method Investment, Nonconsolidated Investee or Group of Investees
Schedule of Equity Method Investments [Line Items]
Net investment income	267	514
Hudson Ventures Fund 2 LP units \| Equity Method Investment, Nonconsolidated Investee or Group of Investees
Schedule of Equity Method Investments [Line Items]
Net investment income	(255)	64
JVM Funds LLC \| Equity Method Investment, Nonconsolidated Investee or Group of Investees
Schedule of Equity Method Investments [Line Items]
Net investment income	(420)	186
RISCOM \| Equity Method Investment, Nonconsolidated Investee or Group of Investees
Schedule of Equity Method Investments [Line Items]
Net investment income	81	18
Universa Black Swan LP units \| Equity Method Investment, Nonconsolidated Investee or Group of Investees
Schedule of Equity Method Investments [Line Items]
Net investment income	$ (556)	$ (493)

Investments - Debt Securities, Trading, and Equity Securities, FV-NI (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Fixed maturity securities, available-for-sale:
Gross Amortized Cost	$ 718,395	$ 662,616
Gross Unrealized Gains	2,657	1,151
Gross Unrealized Losses	(47,915)	(56,195)
Allowance for Credit Losses	0
Total fixed maturity securities, available-for-sale	673,137	607,572
Fixed maturity securities, held-to-maturity:
Gross Amortized Cost	48,537	52,467
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(3,724)	(5,696)
Allowance for Credit Losses	(321)
Total fixed maturity securities, held-to-maturity	44,492	46,771
U.S. government securities
Fixed maturity securities, available-for-sale:
Gross Amortized Cost	46,347	50,416
Gross Unrealized Gains	35	1
Gross Unrealized Losses	(1,464)	(1,876)
Allowance for Credit Losses	0
Total fixed maturity securities, available-for-sale	44,918	48,541
Corporate securities and miscellaneous
Fixed maturity securities, available-for-sale:
Gross Amortized Cost	278,980	255,116
Gross Unrealized Gains	1,571	767
Gross Unrealized Losses	(18,117)	(20,754)
Allowance for Credit Losses	0
Total fixed maturity securities, available-for-sale	262,434	235,129
Municipal securities
Fixed maturity securities, available-for-sale:
Gross Amortized Cost	73,232	65,836
Gross Unrealized Gains	152	24
Gross Unrealized Losses	(6,045)	(8,133)
Allowance for Credit Losses	0
Total fixed maturity securities, available-for-sale	67,339	57,727
Residential mortgage-backed securities
Fixed maturity securities, available-for-sale:
Gross Amortized Cost	146,830	134,844
Gross Unrealized Gains	458	218
Gross Unrealized Losses	(13,398)	(15,206)
Allowance for Credit Losses	0
Total fixed maturity securities, available-for-sale	133,890	119,856
Commercial mortgage-backed securities
Fixed maturity securities, available-for-sale:
Gross Amortized Cost	55,183	40,129
Gross Unrealized Gains	228	50
Gross Unrealized Losses	(3,229)	(3,684)
Allowance for Credit Losses	0
Total fixed maturity securities, available-for-sale	52,182	36,495
Asset-backed securities
Fixed maturity securities, available-for-sale:
Gross Amortized Cost	117,823	116,275
Gross Unrealized Gains	213	91
Gross Unrealized Losses	(5,662)	(6,542)
Allowance for Credit Losses	0
Total fixed maturity securities, available-for-sale	112,374	109,824
Fixed maturity securities, held-to-maturity:
Gross Amortized Cost	48,537	52,467
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(3,724)	(5,696)
Allowance for Credit Losses	(321)
Total fixed maturity securities, held-to-maturity	$ 44,492	$ 46,771

Other Long-Term Investments - Schedule of Indirect Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Schedule of Equity Method Investments [Line Items]
Carrying Value	$ 81,982	$ 86,789
Unfunded Commitment	6,697	6,982
Investment in indirect loans and loan collateral
Schedule of Equity Method Investments [Line Items]
Carrying Value	33,002	38,436
Unfunded Commitment	0	0
Investment in indirect loans and loan collateral \| SMA1
Schedule of Equity Method Investments [Line Items]
Carrying Value	34,654	36,426
Unfunded Commitment	0	0
Investment in indirect loans and loan collateral \| SMA2
Schedule of Equity Method Investments [Line Items]
Carrying Value	(1,652)	2,010
Unfunded Commitment	$ 0	$ 0

Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2023	May 04, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	001-41591
Entity Registrant Name	SKYWARD SPECIALTY INSURANCE GROUP, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	14-1957288
Entity Address, Address Line One	800 Gessner Road
Entity Address, Address Line Two	Suite 600
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77024-4284
City Area Code	713
Local Phone Number	935-4800
Title of 12(b) Security	Common stock, par value $0.01
Trading Symbol	SKWD
Security Exchange Name	NASDAQ
Entity Current Reporting Status	No
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		37,658,111
Entity Central Index Key	0001519449
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1

Losses and Loss Adjustment Expenses

3 Months Ended

Mar. 31, 2023

Insurance [Abstract]

Losses and Loss Adjustment Expenses



($ in thousands)	2023		2022
Reserves for losses and LAE, beginning of period	$	1,141,757	$	979,549
Less: reinsurance recoverable on unpaid claims, beginning of period	(435,986)		(381,338)
Reserves for losses and LAE, beginning of period, net of reinsurance	705,771		598,211
Incurred, net of reinsurance, related to:
Current period	115,142		89,989
Prior years	—		—
Total incurred, net of reinsurance	115,142		89,989
Paid, net of reinsurance, related to:
Current period	8,744		10,605
Prior years	68,745		62,959
Total paid	77,489		73,564
Net reserves for losses and LAE, end of period	743,424		614,636
Plus: reinsurance recoverable on unpaid claims, end of period	429,752		385,146
Reserves for losses and LAE, end of period	$	1,173,176	$	999,782

Reinsurance - Narrative (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Insurance [Abstract]
Market value of trust funds	$ 127,100
Deposit asset	$ 36,800	$ 41,800

Earnings Per Share - Schedule of Earnings Per Share, Excluded from Basic Earnings (Details) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Total
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	1,054,510	1,399,993
Common shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	1,054,510	183,604
Preferred shares, if converted
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	0	1,216,389

Commission and Fee Income

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Commission and Fee Income

Skyward Underwriters Agency, Inc. (“SUA”), a subsidiary of the Company, is a managing general insurance agent and reinsurance broker for property and casualty and accident and health risks in specialty niche markets. Commission and fee income is primarily generated from SUA for the placement of insurance policies on either a third-party insurance or reinsurance company.

The following table sets forth the Company’s disaggregated revenues from contracts with customers for the three months ended March 31, 2023 and 2022:



($ in thousands)	2023		2022
SUA commission revenue	$	857	$	624
SUA fee income	456		(159)
Other	179		(235)
Total commission and fee income	$	1,492	$	230

The Company’s contract assets from commission and fee income as of March 31, 2023 and December 31, 2022 were $1.3 million and $1.3 million, respectively. Contract assets were $0.8 million and $1.2 million as of March 31, 2022 and December 31, 2021, respectively.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI https://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 12
-Subparagraph (e)
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

+ Details

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Amortized cost	$ 718,395	$ 662,616
Allowance for credit losses	$ 321
Preferred stock, par value (in USD per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	10,000,000	2,000,000
Preferred stock, shares issued (in shares)	0	1,969,660
Preferred stock, shares outstanding (in shares)	0	1,969,660
Common stock, par value (in USD per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	500,000,000	168,000,000
Common stock, shares issued (in shares)	37,658,111	16,832,955
Treasury stock, par value (in USD per share)	$ 0.01	$ 0.01
Treasury stock (in shares)	0	233,289

Allowance for Credit Losses

3 Months Ended

Mar. 31, 2023

Credit Loss [Abstract]

Allowance for Credit Losses

Premiums Receivable

The following table sets forth the changes in the allowance for expected credit losses for the three months ended March 31, 2023.


($ in thousands)	Allowance for Credit Losses
Balance at December 31, 2022	$	629
Cumulative effect of adoption of ASU 2016-13 at January 1, 2023	—
Current period change for estimated uncollectible premiums	409
Write-offs of uncollectible premiums receivable	(56)
Balance at March 31, 2023	$	982

Reinsurance Recoverables

The Company analyzes the credit risk associated with its reinsurance recoverables by monitoring the financial strength rating of its reinsurers from A.M. Best, a widely recognized rating agency with an exclusive insurance industry focus. The Company assesses the financial strength rating annually and updated throughout the year as A.M. Best provides updates on ratings and outlooks. The Company assesses the adequacy of various forms of credit enhancements such as reinsurance payables, letters of credit and funds held. A summary of the Company’s reinsurance recoverables net of credit enhancements by A.M. Best rating as of March 31, 2023 was as follows:


A.M. Best Rating	March 31, 2023
A- and above	98.5	%
B++ to B+	1.4

Not rated	0.1

The Company considers reinsurance balances to be past due when it is 90 days past due. The following table sets forth the changes in the allowance for estimated uncollectible reinsurance for the three months ended March 31, 2023:


($ in thousands)	Allowance for Credit Losses
Balance at December 31, 2022	$	—
Cumulative effect of adoption of ASU 2016-13 at January 1, 2023	2,295
Current period change for estimated uncollectible reinsurance	—

Balance at March 31, 2023	$	2,295

Income Taxes

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

The following table set forth the Company’s income tax expense and effective tax rates for the three months ended March 31, 2023 and 2022:



($ in thousands	2023			2022
Income tax expense	$	4,166		$	4,269
Effective tax rate	21.1		%	20.7		%

The effective tax rate will differ from the statutory rate of 21 percent due to permanent differences for disallowed expenses for tax and beneficial adjustments for tax-exempt income and dividends-received deduction.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
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-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Investments - Net Investment Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Net Investment Income [Line Items]
Total investment income	$ 5,664	$ 17,618
Investment expenses	(1,018)	(2,469)
Net investment income	4,646	15,149
Fixed maturity securities, available-for sale
Net Investment Income [Line Items]
Total investment income	6,676	3,224
Fixed maturity securities, held-to-maturity
Net Investment Income [Line Items]
Total investment income	1,003	1,937
Equity securities
Net Investment Income [Line Items]
Total investment income	726	738
Equity method investments
Net Investment Income [Line Items]
Total investment income	(4,664)	9,210
Mortgage loans
Net Investment Income [Line Items]
Total investment income	1,473	818
Indirect loans
Net Investment Income [Line Items]
Total investment income	(1,319)	1,657
Short-term investments and cash
Net Investment Income [Line Items]
Total investment income	1,789	27
Other
Net Investment Income [Line Items]
Total investment income	$ (20)	$ 7

Stock Based Compensation - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Jan. 12, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Authorized target common share (in shares)			3,200,516
Options granted (in shares)	759,990
Aggregate intrinsic value of options	$ 5,200
Weighted average remaining contractual life of options	9 years 9 months 18 days
Unrecognized compensation cost	$ 22,200
Unrecognized compensation cost, recognition period	2 years 1 month 6 days
Stock based compensation expense	$ 1,900	$ 500
Restricted Stock Awards And Units
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Granted (in shares)	1,073,494	191,691
Fair value of shares vested in period	$ 700	$ 700
Options (treasury stock method)
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Contractual term	10 years
Long Term Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Authorized target common share (in shares)	1,833,484	191,691
Stock options granted to employees	$ 4,400
Long Term Incentive Plan \| Restricted Stock Awards And Units
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Granted (in shares)	1,073,494	191,691
Shares granted, value	$ 17,000	$ 2,500
Long Term Incentive Plan \| Options (treasury stock method)
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Authorized target common share (in shares)	759,990
Long Term Incentive Plan \| Low \| Options (treasury stock method)
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Requisite service period	3 years
Long Term Incentive Plan \| High \| Options (treasury stock method)
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Requisite service period	4 years
Long Term Incentive Plan \| Director \| Restricted Stock
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Granted (in shares)	3,332	15,196
Requisite service period	1 year

Mortgage Loans - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Mortgage loans in foreclosure	$ 0.0	$ 6.4
Low
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held-for-investment, term	1 year
Percentage of property appraisal value	40.00%
High
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held-for-investment, term	2 years
Percentage of property appraisal value	80.00%

Related Party Transactions - Westaim Transactions (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Related Party Transaction [Line Items]
Unrealized loss	$ 3,745	$ (5,369)
Skyward Specialty Insurance Group \| Westaim HIIG LP
Related Party Transaction [Line Items]
Ownership interest	39.00%		44.50%
Limited partner \| Westaim
Related Party Transaction [Line Items]
Unrealized loss	$ (1,500)		$ (2,300)

Related Party Transactions (Tables)

3 Months Ended

Mar. 31, 2023

Schedule of Related Party Transactions

Net earned premium and gross commission expense related to these agreements for the three months ended March 31, 2023 and 2022 were as follows:



($ in thousands)	2023		2022
Net earned premium	$	22,185	$	21,018
Commissions	6,853		7,348

Other Long-Term Investments - Unfunded Commitment of Equity Method Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Schedule of Equity Method Investments [Line Items]
Unfunded Commitment	$ 6,697	$ 6,982
Brewer Lane Ventures Fund II LP units
Schedule of Equity Method Investments [Line Items]
Unfunded Commitment	4,610	4,800
Dowling Capital Partners LP units
Schedule of Equity Method Investments [Line Items]
Unfunded Commitment	386	386
Hudson Ventures Fund 2 LP units
Schedule of Equity Method Investments [Line Items]
Unfunded Commitment	$ 1,701	$ 1,796

Summary of Significant Accounting Policies	3 Months Ended
Summary of Significant Accounting Policies	Mar. 31, 2023
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies Basis of Presentation The unaudited condensed consolidated financial statements of Skyward Specialty Insurance Group, Inc. (the “Company”) have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America for interim financial reporting and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all the disclosures required by GAAP for complete consolidated financial statements. Readers are urged to review the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 for a more complete description of the Company’s business and accounting policies. In the opinion of management, all adjustments necessary for a fair statement of the condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. Interim results are not necessarily indicative of results of operations for the full year. The consolidated balance sheet as of December 31, 2022 was derived from the Company’s audited annual consolidated financial statements. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from these estimates. Recent Accounting Standards Adopted In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires organizations to estimate credit losses on certain types of financial instruments, including receivables and fixed maturity securities, by introducing an approach based on expected losses. The expected loss approach required entities to incorporate considerations of historical information, current information, and reasonable and supportable forecasts. The Company adopted ASU 2016-13 effective January 1, 2023 using the modified retrospective approach, by which a cumulative-effect adjustment was made to retained earnings as of the date of adoption. In connection with the adoption of ASU 2016-13, the Company elected the fair value option in accounting for mortgage loans effective January 1, 2023 as targeted transition relief. The adoption of ASU 2016-13 resulted in a $2.3 million increase in accumulated deficit, net of tax. Updates to Significant Accounting Policies The following accounting policies have been updated to reflect the Company's adoption of ASU 2016-13 Financial Instruments - Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments as described above. Investments Available-for-sale Investments in fixed maturities that are classified as available-for-sale and are carried at fair value. For available-for-sale fixed maturities in an unrealized loss position, the Company first determines whether there is an intent to sell the security or if it is more likely than not that the Company will be required to sell the security before maturity or recovery of its cost basis. If either of these criteria were met, the amortized cost of the security is written down to fair value with the losses recognized in net investment gains (losses) on the consolidated statements of operations. If neither of the these criteria were met, the Company determines whether unrealized losses are due to credit-related factors. If the unrealized losses are due to credit-related factors, an allowance for credit losses is determined using a present value of cash flows compared to the amortized cost of the security. The allowance for credit losses is limited to the amount by which fair value is below amortized cost. Changes in the allowance for credit losses are recognized in net investment gains (losses) on the consolidated statements of operations. Credit losses that are limited by the fair value of the security are recognized in stockholders’ equity, net of taxes, as a component of accumulated other comprehensive income (loss). Unrealized losses that are not credit-related continue to be recognized in stockholders’ equity, net of taxes, as a component of accumulated other comprehensive income (loss). Held-to-maturity Investments in fixed maturity securities, held-to-maturity are carried at amortized cost net of an allowance for credit losses. The allowance for credit losses represents the current estimate of expected credit losses. The Company develops a historical loss rate from Moody’s table of estimated multi-year cumulative loss rates for asset backed securities. This historical loss rate is adjusted for current conditions and reasonable and supportable forecasts. Changes in the allowance for credit losses are recognized in net investment gains (losses) on the consolidated statements of operations. Mortgage loans The Company elected the fair value option in accounting for mortgage loans effective January 1, 2023 as targeted transition relief. Under the fair value option, mortgage loans are measured at fair value, and changes in unrealized gains and losses on mortgage loans are reported in net investment gains (losses) on the condensed consolidated statements of operations. Interest income and amortization continue to be recognized in net investment income on the consolidated statements of operations. Reinsurance Reinsurance Recoverables Reinsurance recoverables are carried net of an allowance for credit losses. The allowance for credit losses represents the current estimate of expected credit losses. The Company develops a historical loss rate using the A.M. Best impairment rate and rating transition study which provides historical loss data of similarly rated reinsurance companies based on the expected duration of the receivables. This historical loss rate is adjusted for current conditions and reasonable and supportable forecasts and consideration of current economic conditions. Changes in the allowance for credit losses are recognized in underwriting, acquisition and insurance expenses on the consolidated statements of operations. Premiums Premium receivables are carried net of an allowance for credit losses. The allowance for credit losses represents the current estimate of expected credit losses. The Company develops a historical loss rate using historical write-offs and aging of receivables. This historical loss rate is adjusted for current conditions, reasonable and supportable forecasts and our ability to cancel coverage on a policy after premium is considered past due. Changes in the allowance for credit losses are recognized in underwriting, acquisition and insurance expenses on the consolidated statements of operations.

Investments - Schedule of Unrealized Loss on Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Available for sale, fair value
Less than 12 Months	$ 295,514	$ 408,939
12 Months or More	252,840	143,730
Total	548,354	552,669
Available for sale, gross unrealized losses
Less than 12 Months	(11,690)	(32,893)
12 Months or More	(36,225)	(23,302)
Total	(47,915)	(56,195)
Held-to-maturity, fair value
Less than 12 Months	1,624	46,771
12 Months or More	42,868	0
Total	44,492	46,771
Held-to-maturity, gross unrealized losses
Less than 12 Months	(19)	(5,696)
12 Months or More	(3,705)	0
Total	(3,724)	(5,696)
Available-for-sale and held-to-maturity, fair value
Less than 12 Months	297,138	455,710
12 Months or More	295,708	143,730
Total	592,846	599,440
Available-for-sale and held-to-maturity, gross unrealized losses
Less than 12 Months	(11,709)	(38,589)
12 Months or More	(39,930)	(23,302)
Total	(51,639)	(61,891)
U.S. government securities
Available for sale, fair value
Less than 12 Months	19,722	28,966
12 Months or More	18,777	18,577
Total	38,499	47,543
Available for sale, gross unrealized losses
Less than 12 Months	(443)	(603)
12 Months or More	(1,021)	(1,273)
Total	(1,464)	(1,876)
Corporate securities and miscellaneous
Available for sale, fair value
Less than 12 Months	107,567	171,506
12 Months or More	98,368	34,283
Total	205,935	205,789
Available for sale, gross unrealized losses
Less than 12 Months	(4,059)	(16,063)
12 Months or More	(14,058)	(4,691)
Total	(18,117)	(20,754)
Municipal securities
Available for sale, fair value
Less than 12 Months	35,247	51,701
12 Months or More	22,752	3,689
Total	57,999	55,390
Available for sale, gross unrealized losses
Less than 12 Months	(1,764)	(7,236)
12 Months or More	(4,281)	(897)
Total	(6,045)	(8,133)
Residential mortgage-backed securities
Available for sale, fair value
Less than 12 Months	41,507	56,246
12 Months or More	65,869	52,778
Total	107,376	109,024
Available for sale, gross unrealized losses
Less than 12 Months	(1,919)	(4,152)
12 Months or More	(11,479)	(11,054)
Total	(13,398)	(15,206)
Commercial mortgage-backed securities
Available for sale, fair value
Less than 12 Months	28,658	25,836
12 Months or More	11,393	8,583
Total	40,051	34,419
Available for sale, gross unrealized losses
Less than 12 Months	(869)	(1,488)
12 Months or More	(2,360)	(2,196)
Total	(3,229)	(3,684)
Asset-backed securities
Available for sale, fair value
Less than 12 Months	62,813	74,684
12 Months or More	35,681	25,820
Total	98,494	100,504
Available for sale, gross unrealized losses
Less than 12 Months	(2,636)	(3,351)
12 Months or More	(3,026)	(3,191)
Total	(5,662)	(6,542)
Held-to-maturity, fair value
Less than 12 Months	1,624	46,771
12 Months or More	42,868	0
Total	44,492	46,771
Held-to-maturity, gross unrealized losses
Less than 12 Months	(19)	(5,696)
12 Months or More	(3,705)	0
Total	$ (3,724)	$ (5,696)

Stockholders’ Equity	3 Months Ended
Stockholders’ Equity	Mar. 31, 2023
Equity [Abstract]
Stockholders’ Equity	Stockholders’ Equity Reverse Stock Split On September 23, 2022, the Board of Directors approved a 4-for-1 reverse stock split of the Company’s common stock. The stock split became effective January 3, 2023. All share and per share information included in the accompanying consolidated financial statements and notes to the consolidated financial statements have been retroactively adjusted to reflect the stock split of common stock for all periods presented. Initial Public Offering On January 4, 2023, the Company announced the launch of its initial public offering (“IPO”) of its common stock. On January 12, 2023, the Company priced its IPO of 8,952,383 shares of its common stock, with 4,750,000 shares offered by the Company and 4,202,383 shares sold by selling stockholders, at a public price of $15.00 per share. The shares began trading on January 13, 2023 on the Nasdaq Global Select Market under the ticker symbol “SKWD.” The Company completed its IPO on January 18, 2023. The underwriters exercised in full their option to purchase 1,342,857 additional shares of common stock from the selling stockholders, at a price per share of $15.00. The Company’s net proceeds from the IPO were approximately $62.4 million, after deducting underwriting discounts and specific incremental expenses directly attributable to the IPO. Upon the closing of its IPO, the Company filed an amended and restated certificate of incorporation which, among other things, increased the number of authorized shares consisting of 500,000,000 shares of common stock, par value $0.01 per share, and 10,000,000 shares of preferred stock, par value $0.01 per share. Preferred Shares Conversion The Preferred Shares had preference in liquidation over common stock in the amount of the face value of $50.00 per share and any declared but unpaid dividends to related common shares at the applicable conversion rate. The Preferred Shares provided the holder the option at any time to convert the Preferred Shares into common stock based on the Option Conversion Rate. At December 31, 2022, the Company had 1,969,660 Preferred Shares that could be converted to 16,305,113 common shares based on a conversion price equal to $6.04 per common share. The Preferred Shares were subject to mandatory conversion upon the closing of an IPO at the Mandatory Conversion Rate. At December 31, 2022, the Mandatory Conversion Rate allowed the holder of the Preferred Shares the right to convert into common stock based on a conversion price equal to $6.04 per common share. On January 18, 2023, the 1,969,660 Preferred Shares converted to 16,305,113 shares of common stock upon the Company’s closing of its IPO.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI https://asc.fasb.org/topic&trid=2208762

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI https://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 16
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496180-112644

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
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-Section 50
-Paragraph 6
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008

+ Details

Mortgage Loans - Portfolios (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total mortgage loans	$ 42,335		$ 51,859
Mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total investment income	1,473	$ 818
Retail
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total mortgage loans	15,568		16,516
Retail \| Mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total investment income	595	359
Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total mortgage loans	0		6,329
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total mortgage loans	16,086		15,309
Commercial \| Mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total investment income	494	210
Multi-family
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total mortgage loans	2,596		5,593
Multi-family \| Mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total investment income	117	69
Office
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total mortgage loans	3,210		3,197
Office \| Mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total investment income	106	166
Hospitality
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total mortgage loans	4,875		$ 4,915
Hospitality \| Mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total investment income	$ 161	$ 14

Mortgage Loans (Tables)

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable

The carrying value of the Company’s mortgage loans as of March 31, 2023 and December 31, 2022 were as follows:


($ in thousands)	March 31, 2023		December 31, 2022
Retail	$	15,568	$	16,516
Industrial	—		6,329
Commercial	16,086		15,309
Multi-family	2,596		5,593
Office	3,210		3,197
Hospitality	4,875		4,915
	$	42,335	$	51,859

Investment Income

The following table sets forth the proceeds from sales of available-for-sale fixed maturity securities and equity securities for the three months ended March 31, 2023 and 2022:



($ in thousands)	2023		2022
Fixed maturity securities, available-for sale	$	8,392	$	7,575
Equity securities	13,325		11,966

The following table sets forth the components of net investment income for the three months ended March 31, 2023 and 2022:



($ in thousands)	2023		2022
Income:
Fixed maturity securities, available-for sale	$	6,676	$	3,224
Fixed maturity securities, held-to-maturity	1,003		1,937
Equity securities	726		738
Equity method investments	(4,664)		9,210
Mortgage loans	1,473		818
Indirect loans	(1,319)		1,657
Short-term investments and cash	1,789		27
Other	(20)		7
Total investment income	5,664		17,618
Investment expenses	(1,018)		(2,469)
Net investment income	$	4,646	$	15,149

The Company’s gross investment income for mortgage loans for the three months ended March 31, 2023 and 2022 were as follows:



($ in thousands)	2023		2022
Retail	$	595	$	359

Commercial	494		210
Multi-family	117		69
Office	106		166

Hospitality	161		14
	$	1,473	$	818

Fair Value Measurements - Fair Value, Measure on Recurring Basis, Unobservable Input Reconciliation (Details) - Mortgage Loans $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 52,842
Total gains for the period recognized in net investment gains (losses)	22
Issuances	892
Settlements	(11,421)
Ending balance	42,335
Total losses for the period recognized in net investment gains (losses) attributable to the change in unrealized gains or losses relating to assets held as of period end	$ (14)

Earnings Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Contingently issuable instruments (treasury stock method)
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	345,764	0
Market condition awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	13,795	0
Performance condition awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	40,080	0
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	390,076	0
Options (treasury stock method)
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	333,551	0

Commission and Fee Income - Narrative (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Revenue from Contract with Customer [Abstract]
Contract asset after allowance for credit loss	$ 1,300	$ 1,300	$ 800	$ 1,200

Investments - Investments Classified by Contractual Maturity Date (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Amortized Cost
Due in less than one year	$ 27,656
Due after one year through five years	214,722
Due after five years through ten years	108,566
Due after ten years	47,615
Gross Amortized Cost	718,395	$ 662,616
Fair Value
Due in less than one year	26,956
Due after one year through five years	205,835
Due after five years through ten years	99,254
Due after ten years	42,646
Total	673,137	607,572
Mortgage-backed securities
Amortized Cost
Without single maturity date	202,013
Fair Value
Without single maturity date	186,072
Asset-backed securities
Amortized Cost
Without single maturity date	117,823
Fair Value
Without single maturity date	112,374
Total	$ 112,374	$ 109,824

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenues:
Net earned premiums	$ 182,831	$ 141,726
Commission and fee income	1,492	230
Net investment income	4,646	15,149
Net investment gains (losses)	961	(4,438)
Total revenues	189,930	152,667
Expenses:
Losses and loss adjustment expenses	114,900	89,989
Underwriting, acquisition and insurance expenses	51,655	40,534
Interest expense	2,152	1,177
Amortization expense	387	387
Other expenses	1,114	0
Total expenses	170,208	132,087
Income before income taxes	19,722	20,580
Income tax expense	4,166	4,269
Net income	15,556	16,311
Net income attributable to participating securities	1,274	7,823
Net income attributable to common shareholders	14,282	8,488
Comprehensive income (loss):
Net income	15,556	16,311
Unrealized gains and losses on investments:
Net change in unrealized gains (losses) on investments, net of tax	7,788	(16,705)
Reclassification adjustment for (losses) gains on securities no longer held, net of tax	(47)	301
Total other comprehensive income (loss)	7,741	(16,404)
Comprehensive income (loss)	$ 23,297	$ (93)
Per share data:
Basic earnings per share (in dollar per share)	$ 0.43	$ 0.52
Diluted earnings per share (in dollar per share)	$ 0.42	$ 0.50
Weighted-average common shares outstanding
Basic (in shares)	32,848,243	16,376,720
Diluted (in shares)	36,952,073	32,412,307

Other Long-Term Investments - Carrying Value of Equity Method Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Schedule of Equity Method Investments [Line Items]
Recorded investment balance	$ 81,982	$ 86,789
Arena SOP LP units
Schedule of Equity Method Investments [Line Items]
Recorded investment balance	6,683	8,734
Arena Special Opportunities Fund, LP units
Schedule of Equity Method Investments [Line Items]
Recorded investment balance	42,701	44,504
Brewer Lane Ventures Fund II LP units
Schedule of Equity Method Investments [Line Items]
Recorded investment balance	390	200
Dowling Capital Partners LP units
Schedule of Equity Method Investments [Line Items]
Recorded investment balance	2,231	1,965
Hudson Ventures Fund 2 LP units
Schedule of Equity Method Investments [Line Items]
Recorded investment balance	3,391	3,551
JVM Funds LLC
Schedule of Equity Method Investments [Line Items]
Recorded investment balance	21,698	22,473
RISCOM
Schedule of Equity Method Investments [Line Items]
Recorded investment balance	4,118	4,037
Universa Black Swan LP units
Schedule of Equity Method Investments [Line Items]
Recorded investment balance	$ 770	$ 1,325

Summary of Significant Accounting Policies (Policies)	3 Months Ended
Summary of Significant Accounting Policies (Policies)	Mar. 31, 2023
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The unaudited condensed consolidated financial statements of Skyward Specialty Insurance Group, Inc. (the “Company”) have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America for interim financial reporting and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all the disclosures required by GAAP for complete consolidated financial statements. Readers are urged to review the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 for a more complete description of the Company’s business and accounting policies. In the opinion of management, all adjustments necessary for a fair statement of the condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. Interim results are not necessarily indicative of results of operations for the full year. The consolidated balance sheet as of December 31, 2022 was derived from the Company’s audited annual consolidated financial statements.
Use of Estimates	Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from these estimates.
Recent Account Standards Adopted and Updates to Significant Accounting Policies	Recent Accounting Standards Adopted In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires organizations to estimate credit losses on certain types of financial instruments, including receivables and fixed maturity securities, by introducing an approach based on expected losses. The expected loss approach required entities to incorporate considerations of historical information, current information, and reasonable and supportable forecasts. The Company adopted ASU 2016-13 effective January 1, 2023 using the modified retrospective approach, by which a cumulative-effect adjustment was made to retained earnings as of the date of adoption. In connection with the adoption of ASU 2016-13, the Company elected the fair value option in accounting for mortgage loans effective January 1, 2023 as targeted transition relief. The adoption of ASU 2016-13 resulted in a $2.3 million increase in accumulated deficit, net of tax. Updates to Significant Accounting Policies The following accounting policies have been updated to reflect the Company's adoption of ASU 2016-13 Financial Instruments - Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments as described above.
Investments	Investments Available-for-sale Investments in fixed maturities that are classified as available-for-sale and are carried at fair value. For available-for-sale fixed maturities in an unrealized loss position, the Company first determines whether there is an intent to sell the security or if it is more likely than not that the Company will be required to sell the security before maturity or recovery of its cost basis. If either of these criteria were met, the amortized cost of the security is written down to fair value with the losses recognized in net investment gains (losses) on the consolidated statements of operations. If neither of the these criteria were met, the Company determines whether unrealized losses are due to credit-related factors. If the unrealized losses are due to credit-related factors, an allowance for credit losses is determined using a present value of cash flows compared to the amortized cost of the security. The allowance for credit losses is limited to the amount by which fair value is below amortized cost. Changes in the allowance for credit losses are recognized in net investment gains (losses) on the consolidated statements of operations. Credit losses that are limited by the fair value of the security are recognized in stockholders’ equity, net of taxes, as a component of accumulated other comprehensive income (loss). Unrealized losses that are not credit-related continue to be recognized in stockholders’ equity, net of taxes, as a component of accumulated other comprehensive income (loss). Held-to-maturity Investments in fixed maturity securities, held-to-maturity are carried at amortized cost net of an allowance for credit losses. The allowance for credit losses represents the current estimate of expected credit losses. The Company develops a historical loss rate from Moody’s table of estimated multi-year cumulative loss rates for asset backed securities. This historical loss rate is adjusted for current conditions and reasonable and supportable forecasts. Changes in the allowance for credit losses are recognized in net investment gains (losses) on the consolidated statements of operations. Mortgage loans The Company elected the fair value option in accounting for mortgage loans effective January 1, 2023 as targeted transition relief. Under the fair value option, mortgage loans are measured at fair value, and changes in unrealized gains and losses on mortgage loans are reported in net investment gains (losses) on the condensed consolidated statements of operations. Interest income and amortization continue to be recognized in net investment income on the consolidated statements of operations.
Reinsurance	Reinsurance Reinsurance Recoverables Reinsurance recoverables are carried net of an allowance for credit losses. The allowance for credit losses represents the current estimate of expected credit losses. The Company develops a historical loss rate using the A.M. Best impairment rate and rating transition study which provides historical loss data of similarly rated reinsurance companies based on the expected duration of the receivables. This historical loss rate is adjusted for current conditions and reasonable and supportable forecasts and consideration of current economic conditions. Changes in the allowance for credit losses are recognized in underwriting, acquisition and insurance expenses on the consolidated statements of operations.
Premiums	Premiums Premium receivables are carried net of an allowance for credit losses. The allowance for credit losses represents the current estimate of expected credit losses. The Company develops a historical loss rate using historical write-offs and aging of receivables. This historical loss rate is adjusted for current conditions, reasonable and supportable forecasts and our ability to cancel coverage on a policy after premium is considered past due. Changes in the allowance for credit losses are recognized in underwriting, acquisition and insurance expenses on the consolidated statements of operations.
Fair Value	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 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. 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 judgement and uncertainty. 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, 2023, the Company determined the fair value of these instruments using the income approach utilizing inputs that are unobservable (Level 3). 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 available (Level 2). Subordinated debt: Subordinated debt consists of two debt instruments, the Junior Subordinated Interest Debentures, due September 15, 2036, and Unsecured Subordinated Notes, due May 24, 2039. The carrying value of the Junior Subordinated Interest Debentures approximates the estimated fair value as the instrument accrues interest at current market rates plus a spread. Unsecured Subordinated Notes 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).

Fair Value Measurements - Summary of Subordinated Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Term loan, due December 31, 2024 \| Carrying Value
Debt Instrument [Line Items]
Long-term debt	$ 0	$ 50,000
Term loan, due December 31, 2024 \| Fair Value
Debt Instrument [Line Items]
Long-term debt	0	50,000
Revolving credit facility \| Carrying Value
Debt Instrument [Line Items]
Long-term debt	50,000	0
Revolving credit facility \| Fair Value
Debt Instrument [Line Items]
Long-term debt	50,000	0
Notes payable \| Carrying Value
Debt Instrument [Line Items]
Long-term debt	50,000	50,000
Notes payable \| Fair Value
Debt Instrument [Line Items]
Long-term debt	50,000	50,000
Junior subordinated interest debentures \| Carrying Value
Debt Instrument [Line Items]
Long-term debt	59,149	59,137
Junior subordinated interest debentures \| Fair Value
Debt Instrument [Line Items]
Long-term debt	59,794	59,794
Unsecured subordinated notes \| Carrying Value
Debt Instrument [Line Items]
Long-term debt	19,480	19,472
Unsecured subordinated notes \| Fair Value
Debt Instrument [Line Items]
Long-term debt	18,622	18,934
Subordinated debt, net of debt issuance costs \| Carrying Value
Debt Instrument [Line Items]
Long-term debt	78,629	78,609
Subordinated debt, net of debt issuance costs \| Fair Value
Debt Instrument [Line Items]
Long-term debt	$ 78,416	$ 78,728

Related Party Transactions - Other Transactions (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Professional fees and reimbursements \| Affiliated entity
Related Party Transaction [Line Items]
Expenses from related party transactions	$ 2,100	$ 700

Other Long-Term investments

3 Months Ended

Mar. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

Other Long-Term Investments

Equity Method Investments

The Company’s ownership interests in most of its equity method investments range from approximately 3% to less than 50% where the Company has significant influence but not control.

The carrying value of the Company’s equity method investments as of March 31, 2023 and December 31, 2022 were as follows:


($ in thousands)	March 31, 2023		December 31, 2022
Arena SOP LP units	$	6,683	$	8,734
Arena Special Opportunities Fund, LP units	42,701		44,504
Brewer Lane Ventures Fund II LP units	390		200
Dowling Capital Partners LP units	2,231		1,965
Hudson Ventures Fund 2 LP units	3,391		3,551
JVM Funds LLC units	21,698		22,473
RISCOM	4,118		4,037
Universa Black Swan LP units	770		1,325
	$	81,982	$	86,789

The following table sets forth the components of net investment (loss) income from equity method investments for the three months ended March 31, 2023 and 2022:



($ in thousands)	2023		2022
Arena SOP LP units	$	(2,051)	$	6,117
Arena Special Opportunities Fund, LP units	(1,730)		2,804
Dowling Capital Partners LP units	267		514
Hudson Ventures Fund 2 LP units	(255)		64
JVM Funds LLC	(420)		186
RISCOM	81		18
Universa Black Swan LP units	(556)		(493)
	$	(4,664)	$	9,210

The following table sets forth the unfunded commitment of equity method investments as of March 31, 2023 and December 31, 2022:


($ in thousands)	March 31, 2023		December 31, 2022
Brewer Lane Ventures Fund II LP units	$	4,610	$	4,800
Dowling Capital Partners LP units	386		386
Hudson Ventures Fund 2 LP units	1,701		1,796
	$	6,697	$	6,982

The difference between the cost of an investment and its proportionate share of the underlying equity in net assets is allocated to the various assets and liabilities of the equity method investment. The Company amortizes the difference in net assets over the same useful life of a similar asset as the underlying equity method investment. For investment in RISCOM, a similar asset would be agent relationships. The Company amortizes this difference over a 15-year useful life.

The following table sets forth the Company’s recorded investment in RISCOM compared to its share of underlying equity as of March 31, 2023 and December 31, 2022:


($ in thousands)	March 31, 2023		December 31, 2022
Investment in RISCOM:
Underlying equity	$	2,434	$	2,292
Difference	1,684		1,745
Recorded investment balance	$	4,118	$	4,037

The following table sets forth the Company’s recorded investment in JVM Funds LLC compared to its share of underlying equity as of March 31, 2023 and December 31, 2022:


($ in thousands)	March 31, 2023		December 31, 2022
Investment in JVM Funds LLC:
Underlying equity	$	20,828	$	21,565
Difference	870		908
Recorded investment balance	$	21,698	$	22,473

Investment in Bank Holding Company

The Company carries its investment in Captex Bancshares at cost, less impairment or observable changes in price. The Company reviews these investments for impairment or observable changes in price during each reporting period. There were no impairments or observable changes in price during the three months ended March 31, 2023 and the year ended December 31, 2022.

Investment in Indirect Loans and Loan Collateral

As of March 31, 2023 and December 31, 2022, the Company held indirect investments in collateralized loans and loan collateral through SMA1 and SMA2.

The carrying value and unfunded commitment of the SMA1 and SMA2 as of March 31, 2023 and December 31, 2022 were as follows:


	March 31, 2023				December 31, 2022
($ in thousands)	Carrying Value		Unfunded Commitment		Carrying Value		Unfunded Commitment
SMA1	$	34,654	$	—	$	36,426	$	—
SMA2(1)	(1,652)		—		2,010		—
Investment in indirect loans and loan collateral	$	33,002	$	—	$	38,436	$	—

(1)The carrying value of SMA2 is negative as of March 31, 2023 due to distribution in-transit.

Investment in Trust

The Company carries its investment in the common stock of the Delos Capital Trust n/k/a HIIG Capital Trust I (“Trust”) at cost. There were no impairments or observable changes in price during the three months ended March 31, 2023 and 2022.

Allowance for Credit Losses - Reinsurance Recoverable (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Reinsurance Recoverable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 0
Cumulative effect of adoption of ASU 2016-13 at January 1, 2023	2,295
Current period change for estimated uncollectible reinsurance	0
Ending balance	2,295
Period of adoption, adjustment
Reinsurance Recoverable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 2,295
Cumulative effect of adoption of ASU 2016-13 at January 1, 2023

Stock Based Compensation - Schedule of Nonvested Share Activity (Details) - Restricted Stock Awards And Units - $ / shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Weighted-Average Grant-Date Fair Value
Non-vested, beginning period (in dollars per share)	$ 12.55	$ 13.23
Granted (in dollars per share)	15.85	13.16
Vested (in dollars per share)	12.91	12.47
Forfeited (in dollars per share)	15.10	0
Non-vested, ending period (in dollars per share)	$ 14.97	$ 13.28
Stock and Stock Units
Non-vested, beginning period (in shares)	419,896	375,643
Granted (in shares)	1,073,494	191,691
Vested (in shares)	(32,496)	(55,851)
Forfeited (in shares)	(7,459)	0
Non-vested, ending period (in shares)	1,453,435	511,483

Stock Based Compensation

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stock Based Compensation

Stock Based Compensation On September 23, 2022, the Compensation Committee of the Company’s Board of Directors (“Compensation Committee”) approved the Company’s 2022 Long-Term Incentive Plan (the “2022 Plan”), which became effective on January 12, 2023. The 2022 Plan provides for the granting of restricted stock, restricted stock units, performance stock units, stock options as well as cash-based performance awards, to select employees and non-employee directors of the Company. The 2022 Plan stated that 3,200,516 shares of common stock were available for issuance.

In December 2020, the Compensation Committee approved a Long Term Incentive Plan (the “2021 Plan”). The 2021 Plan provides for the granting of restricted stock, restricted stock units and performance stock units (collectively “restricted stock units” or “stock units”), as well as cash-based performance awards, to select employees and non-employee directors of the Company.

The Compensation Committee granted 1,073,494 and 191,691 restricted stock and restricted stock units during the three months ended March 31, 2023 and 2022, under the 2022 Plan and 2021 Plans, respectively. Members of the Board of Directors were granted 3,332 and 15,196 restricted stock during the three months ended March 31, 2023 and 2022, respectively, with a service period of 1 year. The fair value of restricted stock and restricted stock units under the 2022 Plan for awards granted at the time of the Company’s IPO were granted at the IPO price of $15.00 per share. The fair value of subsequent grants were equal to the closing stock price on the date the restricted stock units were granted.

The Compensation Committee granted 759,990 stock options during the three months ended March 31, 2023. The grant date fair value of the options was determined using the Black-Scholes model where the term was the contractual term of 10 years less the weighted average service period. The volatility was determined based on the historical volatility of comparable publicly traded insurance companies.

The restricted stock and restricted stock units granted to employees and the Board of Directors during the three months ended March 31, 2023 and 2022 were valued at approximately $17.0 million and $2.5 million, respectively, based on the grant date fair value. The stock options granted to employees during the three months ended March 31, 2023 were valued at approximately $4.4 million based on the grant date fair value.

The following table sets forth the Company’s equity awards, target payout ranges and authorized target restricted stock and stock units for the three months ended March 31, 2023 and 2022:

Award
Payout Range

Requisite
Service Period

Target
Stock and Stock Units

Three months ended March 31, 2023

Market condition awards

0%–150%

3 years

37,622

Performance condition awards

0%–150%

3 years

91,350

Service condition awards

N/A

1–4 years

944,522

Stock options

N/A

3–4 years

759,990

1,833,484

Three months ended March 31, 2022

Market condition awards

0%–150%

3 years

28,495

Performance condition awards

0%–150%

3 years

26,214

Service condition awards

N/A

1–3 years

136,982

191,691

The following table sets forth option activity for the three months ended March 31, 2023:


	Weighted-Average Exercise Price		Stock
Outstanding at January 1, 2023			—
Granted	$	15.00	759,990
Exercised			—
Forfeited			—
Outstanding at March 31, 2023	$	15.00	759,990

The intrinsic value of each option is determined based on the difference between the fair value of the underlying share and the exercise price of the underlying option. The aggregate intrinsic value of options outstanding at March 31, 2023 was $5.2 million. The weighted-average remaining contractual life of the options outstanding at March 31, 2023 was 9.8 years.

The following table sets forth the Company’s restricted stock and restricted stock units activity for the three months ended March 31, 2023 and 2022:


	Weighted-Average Grant-Date Fair Value		Stock and Stock Units
Non-vested at January 1, 2023	$	12.55	419,896
Granted	15.85		1,073,494
Vested	12.91		(32,496)
Forfeited	15.10		(7,459)
Non-vested at March 31, 2023	$	14.97	1,453,435

Non-vested at January 1, 2022	$	13.23	375,643
Granted	13.16		191,691
Vested	12.47		(55,851)
Forfeited	$	—	—
Non-vested at March 31, 2022	$	13.28	511,483

The total fair value of shares vested at March 31, 2023 and 2022 were $0.7 million and $0.7 million, respectively.

As of March 31, 2023 the total unrecognized compensation cost related to non-vested, share-based compensation awards was $22.2 million and the weighted average period over which that cost is expected to be recognized is 2.1 years. For the three months ended March 31, 2023 and 2022, the Company recognized $1.9 million and $0.5 million, respectively, of stock based compensation expense.

Allowance for Credit Losses - Premium Receivable (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Premium Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 629
Cumulative effect of adoption of ASU 2016-13 at January 1, 2023	982
Current period change for estimated uncollectible premiums	409
Write-offs of uncollectible premiums receivable	(56)
Ending balance	982
Period of adoption, adjustment
Premium Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 0
Cumulative effect of adoption of ASU 2016-13 at January 1, 2023

Stock Based Compensation - Summary of Options Activity (Details)	3 Months Ended
	Mar. 31, 2023 $ / shares shares
Stock
Outstanding, beginning of period (in shares)	0
Granted (in shares)	759,990
Exercised (in shares)	0
Forfeited (in shares)	0
Outstanding, ending of period (in shares)	759,990
Weighted-Average Exercise Price
Granted, weighted average exercise price (in usd per share) \| $ / shares	$ 15.00
Outstanding, weighted average exercise price (in usd per share) \| $ / shares	$ 15.00

Notes Payable	3 Months Ended
Notes Payable	Mar. 31, 2023
Debt Disclosure [Abstract]
Notes Payable	Notes Payable The Company entered into an agreement to obtain a new unsecured revolving credit facility (the “Revolving Credit Facility”) with a syndicate of participating banks during the three months ended March 31, 2023. The Revolving Credit Facility provided the Company with up to a $150.0 million revolving credit facility, with an accordion that can increase the capacity by $50.0 million, and a letter of credit sub-facility of up to $30.0 million. During the three months ended March 31, 2023, the Company drew $50.0 million on the Revolving Credit Facility and used the proceeds to pay off the principal on its existing term loan. The Company subsequently terminated the existing term loan and revolving line of credit. The interest rate on the Revolving Credit Facility was the Secured Overnight Financing Rate (“SOFR”) plus a margin of between 150 and 190 basis points based on the ratio of debt to total capital and a credit spread adjustment of 10 basis points. The Company was subject to covenants on the Revolving Credit Facility based on minimum net worth, maximum debt to capital ratio, minimum A.M. Best Rating and minimum liquidity. As of March 31, 2023, the Company was in compliance with all covenants.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1E
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Reinsurance - Reinsurance Recoverables and Ceded Premiums (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Insurance [Abstract]
Unpaid losses and loss adjustment expenses ceded	$ 429,752	$ 435,986	$ 385,146	$ 381,338
Paid losses and loss adjustment expense ceded	107,463	107,228
Loss portfolio transfer	35,584	38,145
Allowance for credit losses	(2,295)	0
Reinsurance recoverables	570,504	581,359
Ceded unearned premium	$ 197,044	$ 157,645

Underwriting, Acquisition and Insurance Expenses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Other Income and Expenses [Abstract]
Amortization of policy acquisition costs	$ 21,235	$ 13,421
Other operating and general expenses	30,420	27,113
Total underwriting, acquisition and insurance expenses	$ 51,655	$ 40,534

- Definition

Amount of amortization expense (reversal of expense) for deferred policy acquisition costs.

+ References + Details

Underwriting, Acquisition and Insurance Expenses (Tables)

3 Months Ended

Mar. 31, 2023

Other Income and Expenses [Abstract]

Schedule of Underwriting, Acquisition and Insurance Expenses

The following table sets forth the components of underwriting, acquisition and insurance expenses for the three months ended March 31, 2023 and 2022:



($ in thousands)	2023		2022
Amortization of policy acquisition costs	$	21,235	$	13,421
Other operating and general expenses	30,420		27,113
Total underwriting, acquisition and insurance expenses	$	51,655	$	40,534

Investments

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Investments

The following tables set forth the amortized cost and the fair value by investment category at March 31, 2023 and December 31, 2022:


($ in thousands)	Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
March 31, 2023
Fixed maturity securities, available-for-sale:
U.S. government securities	$	46,347	$	35	$	(1,464)	$	—	$	44,918
Corporate securities and miscellaneous	278,980		1,571		(18,117)		—		262,434
Municipal securities	73,232		152		(6,045)		—		67,339
Residential mortgage-backed securities	146,830		458		(13,398)		—		133,890
Commercial mortgage-backed securities	55,183		228		(3,229)		—		52,182
Asset-backed securities	117,823		213		(5,662)		—		112,374
Total fixed maturity securities, available-for-sale	$	718,395	$	2,657	$	(47,915)	$	—	$	673,137
Fixed maturity securities, held-to-maturity:
Asset-backed securities	$	48,537	$	—	$	(3,724)	$	(321)	$	44,492
Total fixed maturity securities, held-to-maturity	$	48,537	$	—	$	(3,724)	$	(321)	$	44,492


($ in thousands)	Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Loss		Fair Value
December 31, 2022
Fixed maturity securities, available-for-sale:
U.S. government securities	$	50,416	$	1	$	(1,876)	$	48,541
Corporate securities and miscellaneous	255,116		767		(20,754)		235,129
Municipal securities	65,836		24		(8,133)		57,727
Residential mortgage-backed securities	134,844		218		(15,206)		119,856
Commercial mortgage-backed securities	40,129		50		(3,684)		36,495
Asset-backed securities	116,275		91		(6,542)		109,824
Total fixed maturity securities, available-for-sale	$	662,616	$	1,151	$	(56,195)	$	607,572
Fixed maturity securities, held-to-maturity:
Asset-backed securities	$	52,467	$	—	$	(5,696)	$	46,771
Total fixed maturity securities, held-to-maturity	$	52,467	$	—	$	(5,696)	$	46,771

The following table sets forth the amortized cost and fair value of available-for-sale fixed maturity securities by contractual maturity at March 31, 2023:



($ in thousands)	Amortized Cost		Fair Value
Due in less than one year	$	27,656	$	26,956
Due after one year through five years	214,722		205,835
Due after five years through ten years	108,566		99,254
Due after ten years	47,615		42,646
Mortgage-backed securities	202,013		186,072
Asset-backed securities	117,823		112,374
Total	$	718,395	$	673,137

Expected maturities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Also, changing interest rates, tax considerations or other factors may result in portfolio sales prior to maturity.

The Company’s fixed maturity securities, held-to-maturity, at March 31, 2023 consisted entirely of asset backed securities that were not due at a single maturity date.

The following tables set forth the gross unrealized losses and the corresponding fair values of investments, aggregated by length of time that individual securities had been in a continuous unrealized loss position as of March 31, 2023 and December 31, 2022:


	Less than 12 Months				12 Months or More				Total
($ in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
March 31, 2023
Fixed maturity securities, available-for-sale:
U.S. government securities	$	19,722	$	(443)	$	18,777	$	(1,021)	$	38,499	$	(1,464)
Corporate securities and miscellaneous	107,567		(4,059)		98,368		(14,058)		205,935		(18,117)
Municipal securities	35,247		(1,764)		22,752		(4,281)		57,999		(6,045)
Residential mortgage-backed securities	41,507		(1,919)		65,869		(11,479)		107,376		(13,398)
Commercial mortgage-backed securities	28,658		(869)		11,393		(2,360)		40,051		(3,229)
Asset-backed securities	62,813		(2,636)		35,681		(3,026)		98,494		(5,662)
Total fixed maturity securities, available-for-sale	295,514		(11,690)		252,840		(36,225)		548,354		(47,915)
Fixed maturity securities, held-to-maturity:
Asset-backed securities	1,624		(19)		42,868		(3,705)		44,492		(3,724)
Total fixed maturity securities, held-to-maturity:	1,624		(19)		42,868		(3,705)		44,492		(3,724)
Total	$	297,138	$	(11,709)	$	295,708	$	(39,930)	$	592,846	$	(51,639)


	Less than 12 Months				12 Months or More				Total
($ in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
December 31, 2022
Fixed maturity securities, available-for-sale:
U.S. government securities	$	28,966	$	(603)	$	18,577	$	(1,273)	$	47,543	$	(1,876)
Corporate securities and miscellaneous	171,506		(16,063)		34,283		(4,691)		205,789		(20,754)
Municipal securities	51,701		(7,236)		3,689		(897)		55,390		(8,133)
Residential mortgage-backed securities	56,246		(4,152)		52,778		(11,054)		109,024		(15,206)
Commercial mortgage-backed securities	25,836		(1,488)		8,583		(2,196)		34,419		(3,684)
Asset-backed securities	74,684		(3,351)		25,820		(3,191)		100,504		(6,542)
Total fixed maturity securities, available-for-sale	408,939		(32,893)		143,730		(23,302)		552,669		(56,195)
Fixed maturity securities, held-to-maturity:
Asset-backed securities	46,771		(5,696)		—		—		46,771		(5,696)
Total fixed maturity securities, held-to-maturity:	46,771		(5,696)		—		—		46,771		(5,696)
Total	$	455,710	$	(38,589)	$	143,730	$	(23,302)	$	599,440	$	(61,891)

The Company regularly monitors its available-for-sale fixed maturity securities that have fair values less than cost or amortized cost for signs of impairment, an assessment that requires significant management judgment regarding the evidence known. Such judgments could change in the future as more information becomes known, which could negatively impact the amounts reported. Among the factors that management considers for fixed maturity securities are the financial condition of the issuer including receipt of scheduled principal and interest cash flows, and intent to sell, including if it is more likely than not that the Company will be required to sell the investments before recovery.

As of March 31, 2023, the Company had 551 lots of fixed maturity securities in an unrealized loss position. The Company does not have an intent to sell these securities and it is not more likely than not that the Company will be required to sell these securities before maturity or recovery of its cost basis. The Company determined that no credit impairment existed in the gross unrealized holding losses because the credit ratings of these securities were consistent with the credit ratings when purchased and/or at origination, there were no adverse changes in financial condition of the issuer and no adverse credit quality events in underlying assets. The Company attributed the unrealized losses to the changes in interest rates.

The following table sets forth the components of net investment gains (losses) for the three months ended March 31, 2023 and 2022:



($ in thousands)	2023		2022
Gross realized gains
Fixed maturity securities, available-for sale	$	493	$	16
Equity securities	1,227		1,830
Other	1		31
Total	1,721		1,877
Gross realized losses
Fixed maturity securities, available-for sale	(237)		(276)
Equity securities	(4,289)		(654)
Other	(1)		(16)
Total	(4,527)		(946)
Net unrealized gains (losses) on investments
Equity securities	3,745		(5,369)
Mortgage loans	22		—
Net investment gains (losses)	$	961	$	(4,438)

The following table sets forth the proceeds from sales of available-for-sale fixed maturity securities and equity securities for the three months ended March 31, 2023 and 2022:



($ in thousands)	2023		2022
Fixed maturity securities, available-for sale	$	8,392	$	7,575
Equity securities	13,325		11,966

The following table sets forth the components of net investment income for the three months ended March 31, 2023 and 2022:



($ in thousands)	2023		2022
Income:
Fixed maturity securities, available-for sale	$	6,676	$	3,224
Fixed maturity securities, held-to-maturity	1,003		1,937
Equity securities	726		738
Equity method investments	(4,664)		9,210
Mortgage loans	1,473		818
Indirect loans	(1,319)		1,657
Short-term investments and cash	1,789		27
Other	(20)		7
Total investment income	5,664		17,618
Investment expenses	(1,018)		(2,469)
Net investment income	$	4,646	$	15,149

The following table sets forth the change in net unrealized gains (losses) on the Company’s investment portfolio, net of deferred income taxes, included in other comprehensive income (loss) for the three months ended March 31, 2023 and 2022:



($ in thousands)	2023		2022
Fixed maturity securities	$	9,786	$	(20,764)
Deferred income taxes	(2,045)		4,360
Total	$	7,741	$	(16,404)

Commission and Fee Income (Tables)

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table sets forth the Company’s disaggregated revenues from contracts with customers for the three months ended March 31, 2023 and 2022:



($ in thousands)	2023		2022
SUA commission revenue	$	857	$	624
SUA fee income	456		(159)
Other	179		(235)
Total commission and fee income	$	1,492	$	230

Stockholders’ Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended
	Jan. 18, 2023	Jan. 12, 2023	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Apr. 24, 2020
Subsidiary, Sale of Stock [Line Items]
Common stock, par value (in USD per share)			$ 0.01		$ 0.01
Proceeds from initial public offering			$ 66,262	$ 0
Common stock, shares authorized (in shares)			500,000,000		168,000,000
Preferred stock, shares authorized (in shares)			10,000,000		2,000,000
Preferred stock, par value (in USD per share)			$ 0.01		$ 0.01
Preferred stock, liquidation preference (in dollars per share)						$ 50.00
Preferred stock, shares outstanding (in shares)	1,969,660		0		1,969,660
Common shares upon conversion of preferred shares (in shares)					16,305,113
Preferred stock, convertible, conversion price (in dollars per share)					$ 6.04
Convertible preferred stock (in shares)	16,305,113
IPO
Subsidiary, Sale of Stock [Line Items]
Sale of stock, number of shares issued (in shares)		8,952,383
Sale of stock, price per share (usd per share)		$ 15.00
Proceeds from initial public offering	$ 62,400
IPO - Shares From Company
Subsidiary, Sale of Stock [Line Items]
Sale of stock, number of shares issued (in shares)		4,750,000
IPO - Shares From Existing Shareholders
Subsidiary, Sale of Stock [Line Items]
Sale of stock, number of shares issued (in shares)		4,202,383
Over-Allotment Option
Subsidiary, Sale of Stock [Line Items]
Sale of stock, number of shares issued (in shares)	1,342,857

Earnings Per Share

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Earnings Per Share

The following table sets forth a reconciliation of the numerator and denominator of basic and diluted earnings per share computations contained in the period-ended consolidated financial statements for the three months ended March 31, 2023 and 2022:



($ in thousands, except for share and per share amounts)	2023		2022
Numerator
Net income	$	15,556	$	16,311
Less: Undistributed income allocated to participating securities	(1,274)		(7,823)
Net income attributable to common shareholders (numerator for basic earnings per share)	14,282		8,488
Add back: Undistributed income allocated to participating securities	1,274		7,823
Net income (numerator for diluted earnings per share under the two-class method)	$	15,556	$	16,311
Denominator
Basic weighted-average common shares	32,848,243		16,376,720

Preferred shares (if converted method)	2,931,256		15,092,585
Contingently issuable instruments (treasury stock method)	708,746		714,185
Market condition awards (contingently issuable)	87,750		40,460
Performance awards (contingently issuable)	38,441		32,362
Restricted stock units (treasury stock method)	318,421		155,995
Options (treasury stock method)	19,216		—
Diluted weighted-average common share equivalents	36,952,073		32,412,307
Basic earnings per share	$	0.43	$	0.52
Diluted earnings per share	$	0.42	$	0.50

The Company’s preferred shares participate in dividends and distributions with common stock on an as-converted basis and represent a participating security. Instruments awarded to employees that provide the holder the right to purchase common stock at a fixed price were included as potential common shares, weighted for the portion of the period they were granted, if dilutive.

Anti-dilutive instruments are excluded from the calculation of diluted weighted-average common share equivalents as they would have an anti-dilutive impact. The following table sets forth the weighted-average instruments that were excluded from the calculation of diluted weighted-average common share equivalents during the three months ended March 31, 2023 and 2022.



	2023	2022

Contingently issuable instruments (treasury stock method)	345,764	—
Market condition awards (contingently issuable)	13,795	—
Performance awards (contingently issuable)	40,080	—
Restricted stock units (treasury stock method)	390,076	—
Options (treasury stock method)	333,551	—

The Company’s common and preferred shares financed by stock notes are contingently issuable instruments where the holder must return, all or part of, the shares if the stock notes are not paid off. The following table sets forth common share equivalents of contingently issuable instruments (in shares) that were excluded from basic earnings per share for the three months ended March 31, 2023 and 2022:



	2023	2022
Common shares	1,054,510	183,604
Preferred shares, if converted	—	1,216,389
Total	1,054,510	1,399,993

The impact of the contingently issuable instruments on diluted earnings per share was calculated using the treasury stock method and included in the reconciliation of the denominator of the basic and diluted earnings per share computations for the three months ended March 31, 2023 and 2022.

Fair Value Measurements

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair ValueMeasurements

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 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.

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 judgement and uncertainty.

The following table sets forth the range and weighted average, weighted by relative fair value, of the spread as of March 31, 2023:



	March 31, 2023
High	9.50	%
Low	2.05	%
Weighted average	5.85	%

The following tables set forth the Company’s investments within the fair value hierarchy at March 31, 2023 and December 31, 2022:


March 31, 2023
($ in thousands)	Level 1		Level 2		Level 3		Total
Fixed maturity securities, available-for-sale:
U.S. government securities	$	44,918	$	—	$	—	$	44,918
Corporate securities and miscellaneous	—		262,434		—		262,434
Municipal securities	—		67,339		—		67,339
Residential mortgage-backed securities	—		133,890		—		133,890
Commercial mortgage-backed securities	—		52,182		—		52,182
Asset-backed securities	—		112,374		—		112,374
Total fixed maturity securities, available-for-sale	44,918		628,219		—		673,137
Fixed maturity securities, held-to-maturity:
Asset-backed securities	—		—		44,492		44,492
Total fixed maturity securities, held-to-maturity	—		—		44,492		44,492
Common stocks:
Consumer discretionary	1,965		—		—		1,965
Consumer staples	13,116		—		—		13,116
Energy	2,947		—		—		2,947
Finance	19,088		—		—		19,088
Industrial	11,244		—		—		11,244
Information technology	2,912		—		—		2,912
Materials	3,253		—		—		3,253
Other	2,292		—		—		2,292
Total common stocks	56,817		—		—		56,817
Preferred stocks:
Consumer staples			473		—		473
Finance			3,979		—		3,979
Industrial	—		1,135		—		1,135
Other	—		735		—		735
Total preferred stocks	—		6,322		—		6,322
Mutual funds:
Fixed income	5,191		—		—		5,191
Equity	51,615		—		—		51,615
Commodity	520		—		—		520
Total mutual funds	57,326		—		—		57,326
Total equity securities	114,143		6,322		—		120,465
Mortgage loans	—		—		42,335		42,335
Short-term investments	287,351		—		—		287,351
Total investments	$	446,412	$	634,541	$	86,827	$	1,167,780


December 31, 2022
($ in thousands)	Level 1		Level 2		Level 3		Total
Fixed maturity securities, available-for-sale:
U.S. government securities	$	48,541	$	—	$	—	$	48,541
Corporate securities and miscellaneous	—		235,129		—		235,129
Municipal securities	—		57,727		—		57,727
Residential mortgage-backed securities	—		119,856		—		119,856
Commercial mortgage-backed securities	—		36,495		—		36,495
Asset-backed securities	—		109,824		—		109,824
Total fixed maturity securities, available-for-sale	48,541		559,031		—		607,572
Fixed maturity securities, held-to-maturity:
Asset-backed securities	—		—		46,771		46,771
Total fixed maturity securities, held-to-maturity:	—		—		46,771		46,771
Common stocks:
Consumer discretionary	1,948		—		—		1,948
Consumer staples	12,036		—		—		12,036
Energy	3,241		—		—		3,241
Finance	22,636		—		—		22,636
Industrial	9,452		—		—		9,452
Information technology	2,284		—		—		2,284
Materials	2,820		—		—		2,820
Other	1,579		—		—		1,579
Total common stocks	55,996		—		—		55,996
Preferred stocks:
Consumer staples	—		117		—		117
Finance	—		7,085		—		7,085
Industrial	—		1,020		—		1,020
Other	—		549		—		549
Total preferred stocks	—		8,771		—		8,771
Mutual funds:
Fixed income	5,068		—		—		5,068
Equity	49,773		—		—		49,773
Commodity	561		—		—		561
Total mutual funds	55,402		—		—		55,402
Total equity securities	111,398		8,771		—		120,169
Mortgage loans	—		—		52,842		52,842
Short-term investments	121,158		—		—		121,158
Total investments	$	281,097	$	567,802	$	99,613	$	948,512

The following table sets 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, 2023:


($ in thousands)	Mortgage Loans
Balance at December 31, 2022	$	52,842
Total gains for the period recognized in net investment gains (losses)	$	22
Issuances	$	892
Settlements	(11,421)
Balance at March 31, 2023	$	42,335
Total losses for the period recognized in net investment gains (losses) attributable to the change in unrealized gains or losses relating to assets held as of period end	$	(14)

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 judgements 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, 2023, the Company determined the fair value of these instruments using the income approach utilizing inputs that are unobservable (Level 3).

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 available (Level 2).

Subordinated debt: Subordinated debt consists of two debt instruments, the Junior Subordinated Interest Debentures, due September 15, 2036, and Unsecured Subordinated Notes, due May 24, 2039. The carrying value of the Junior Subordinated Interest Debentures approximates the estimated fair value as the instrument accrues interest at current market rates plus a spread. Unsecured Subordinated Notes 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, 2023 and December 31, 2022:


	March 31, 2023				December 31, 2022
($ in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Notes Payable
Term loan, due December 31, 2024	$	—	$	—	$	50,000	$	50,000
Revolving credit facility	50,000		50,000		—		—
Notes payable	$	50,000	$	50,000	$	50,000	$	50,000
Subordinated Debt
Junior subordinated interest debentures	$	59,149	$	59,794	$	59,137	$	59,794
Unsecured subordinated notes	19,480		18,622		19,472		18,934
Subordinated debt, net of debt issuance costs	$	78,629	$	78,416	$	78,609	$	78,728

Other financial instruments qualify as insurance-related products and are specifically exempted from fair value disclosure requirements.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Other Long-Term Investments - Narrative (Details)	3 Months Ended
Other Long-Term Investments - Narrative (Details)	Mar. 31, 2023
RISCOM
Schedule of Equity Method Investments [Line Items]
Useful life	15 years

Fair Value Measurements - Fair Value Measurement Inputs and Valuation Techniques (Details) - Level 3 - Measurement Input, Incremental Cost of Capital	Mar. 31, 2023
High
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans receivable	9.50%
Low
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans receivable	2.05%
Weighted average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans receivable	5.85%

Underwriting, Acquisition and Insurance Expenses

3 Months Ended

Mar. 31, 2023

Other Income and Expenses [Abstract]

Underwriting, Acquisition and Insurance Expenses

The following table sets forth the components of underwriting, acquisition and insurance expenses for the three months ended March 31, 2023 and 2022:



($ in thousands)	2023		2022
Amortization of policy acquisition costs	$	21,235	$	13,421
Other operating and general expenses	30,420		27,113
Total underwriting, acquisition and insurance expenses	$	51,655	$	40,534

Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted



($ in thousands, except for share and per share amounts)	2023		2022
Numerator
Net income	$	15,556	$	16,311
Less: Undistributed income allocated to participating securities	(1,274)		(7,823)
Net income attributable to common shareholders (numerator for basic earnings per share)	14,282		8,488
Add back: Undistributed income allocated to participating securities	1,274		7,823
Net income (numerator for diluted earnings per share under the two-class method)	$	15,556	$	16,311
Denominator
Basic weighted-average common shares	32,848,243		16,376,720

Preferred shares (if converted method)	2,931,256		15,092,585
Contingently issuable instruments (treasury stock method)	708,746		714,185
Market condition awards (contingently issuable)	87,750		40,460
Performance awards (contingently issuable)	38,441		32,362
Restricted stock units (treasury stock method)	318,421		155,995
Options (treasury stock method)	19,216		—
Diluted weighted-average common share equivalents	36,952,073		32,412,307
Basic earnings per share	$	0.43	$	0.52
Diluted earnings per share	$	0.42	$	0.50

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The following table sets forth the weighted-average instruments that were excluded from the calculation of diluted weighted-average common share equivalents during the three months ended March 31, 2023 and 2022.



	2023	2022

Contingently issuable instruments (treasury stock method)	345,764	—
Market condition awards (contingently issuable)	13,795	—
Performance awards (contingently issuable)	40,080	—
Restricted stock units (treasury stock method)	390,076	—
Options (treasury stock method)	333,551	—

The following table sets forth common share equivalents of contingently issuable instruments (in shares) that were excluded from basic earnings per share for the three months ended March 31, 2023 and 2022:



	2023	2022
Common shares	1,054,510	183,604
Preferred shares, if converted	—	1,216,389
Total	1,054,510	1,399,993

Commission and Fee Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Total commission and fee income	$ 1,492	$ 230
SUA commission revenue
Disaggregation of Revenue [Line Items]
Total commission and fee income	857	624
SUA fee income
Disaggregation of Revenue [Line Items]
Total commission and fee income	456	(159)
Other
Disaggregation of Revenue [Line Items]
Total commission and fee income	$ 179	$ (235)

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI https://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Investments (Tables)

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Debt Securities, Trading, and Equity Securities, FV-NI

The following tables set forth the amortized cost and the fair value by investment category at March 31, 2023 and December 31, 2022:


($ in thousands)	Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
March 31, 2023
Fixed maturity securities, available-for-sale:
U.S. government securities	$	46,347	$	35	$	(1,464)	$	—	$	44,918
Corporate securities and miscellaneous	278,980		1,571		(18,117)		—		262,434
Municipal securities	73,232		152		(6,045)		—		67,339
Residential mortgage-backed securities	146,830		458		(13,398)		—		133,890
Commercial mortgage-backed securities	55,183		228		(3,229)		—		52,182
Asset-backed securities	117,823		213		(5,662)		—		112,374
Total fixed maturity securities, available-for-sale	$	718,395	$	2,657	$	(47,915)	$	—	$	673,137
Fixed maturity securities, held-to-maturity:
Asset-backed securities	$	48,537	$	—	$	(3,724)	$	(321)	$	44,492
Total fixed maturity securities, held-to-maturity	$	48,537	$	—	$	(3,724)	$	(321)	$	44,492


($ in thousands)	Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Loss		Fair Value
December 31, 2022
Fixed maturity securities, available-for-sale:
U.S. government securities	$	50,416	$	1	$	(1,876)	$	48,541
Corporate securities and miscellaneous	255,116		767		(20,754)		235,129
Municipal securities	65,836		24		(8,133)		57,727
Residential mortgage-backed securities	134,844		218		(15,206)		119,856
Commercial mortgage-backed securities	40,129		50		(3,684)		36,495
Asset-backed securities	116,275		91		(6,542)		109,824
Total fixed maturity securities, available-for-sale	$	662,616	$	1,151	$	(56,195)	$	607,572
Fixed maturity securities, held-to-maturity:
Asset-backed securities	$	52,467	$	—	$	(5,696)	$	46,771
Total fixed maturity securities, held-to-maturity	$	52,467	$	—	$	(5,696)	$	46,771

Investments Classified by Contractual Maturity Date

The following table sets forth the amortized cost and fair value of available-for-sale fixed maturity securities by contractual maturity at March 31, 2023:



($ in thousands)	Amortized Cost		Fair Value
Due in less than one year	$	27,656	$	26,956
Due after one year through five years	214,722		205,835
Due after five years through ten years	108,566		99,254
Due after ten years	47,615		42,646
Mortgage-backed securities	202,013		186,072
Asset-backed securities	117,823		112,374
Total	$	718,395	$	673,137

Debt Securities, Available-for-Sale, Unrealized Loss Position, Fair Value


	Less than 12 Months				12 Months or More				Total
($ in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
March 31, 2023
Fixed maturity securities, available-for-sale:
U.S. government securities	$	19,722	$	(443)	$	18,777	$	(1,021)	$	38,499	$	(1,464)
Corporate securities and miscellaneous	107,567		(4,059)		98,368		(14,058)		205,935		(18,117)
Municipal securities	35,247		(1,764)		22,752		(4,281)		57,999		(6,045)
Residential mortgage-backed securities	41,507		(1,919)		65,869		(11,479)		107,376		(13,398)
Commercial mortgage-backed securities	28,658		(869)		11,393		(2,360)		40,051		(3,229)
Asset-backed securities	62,813		(2,636)		35,681		(3,026)		98,494		(5,662)
Total fixed maturity securities, available-for-sale	295,514		(11,690)		252,840		(36,225)		548,354		(47,915)
Fixed maturity securities, held-to-maturity:
Asset-backed securities	1,624		(19)		42,868		(3,705)		44,492		(3,724)
Total fixed maturity securities, held-to-maturity:	1,624		(19)		42,868		(3,705)		44,492		(3,724)
Total	$	297,138	$	(11,709)	$	295,708	$	(39,930)	$	592,846	$	(51,639)


	Less than 12 Months				12 Months or More				Total
($ in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
December 31, 2022
Fixed maturity securities, available-for-sale:
U.S. government securities	$	28,966	$	(603)	$	18,577	$	(1,273)	$	47,543	$	(1,876)
Corporate securities and miscellaneous	171,506		(16,063)		34,283		(4,691)		205,789		(20,754)
Municipal securities	51,701		(7,236)		3,689		(897)		55,390		(8,133)
Residential mortgage-backed securities	56,246		(4,152)		52,778		(11,054)		109,024		(15,206)
Commercial mortgage-backed securities	25,836		(1,488)		8,583		(2,196)		34,419		(3,684)
Asset-backed securities	74,684		(3,351)		25,820		(3,191)		100,504		(6,542)
Total fixed maturity securities, available-for-sale	408,939		(32,893)		143,730		(23,302)		552,669		(56,195)
Fixed maturity securities, held-to-maturity:
Asset-backed securities	46,771		(5,696)		—		—		46,771		(5,696)
Total fixed maturity securities, held-to-maturity:	46,771		(5,696)		—		—		46,771		(5,696)
Total	$	455,710	$	(38,589)	$	143,730	$	(23,302)	$	599,440	$	(61,891)

Gain (Loss) on Securities

The following table sets forth the components of net investment gains (losses) for the three months ended March 31, 2023 and 2022:



($ in thousands)	2023		2022
Gross realized gains
Fixed maturity securities, available-for sale	$	493	$	16
Equity securities	1,227		1,830
Other	1		31
Total	1,721		1,877
Gross realized losses
Fixed maturity securities, available-for sale	(237)		(276)
Equity securities	(4,289)		(654)
Other	(1)		(16)
Total	(4,527)		(946)
Net unrealized gains (losses) on investments
Equity securities	3,745		(5,369)
Mortgage loans	22		—
Net investment gains (losses)	$	961	$	(4,438)

Investment Income

The following table sets forth the proceeds from sales of available-for-sale fixed maturity securities and equity securities for the three months ended March 31, 2023 and 2022:



($ in thousands)	2023		2022
Fixed maturity securities, available-for sale	$	8,392	$	7,575
Equity securities	13,325		11,966

The following table sets forth the components of net investment income for the three months ended March 31, 2023 and 2022:



($ in thousands)	2023		2022
Income:
Fixed maturity securities, available-for sale	$	6,676	$	3,224
Fixed maturity securities, held-to-maturity	1,003		1,937
Equity securities	726		738
Equity method investments	(4,664)		9,210
Mortgage loans	1,473		818
Indirect loans	(1,319)		1,657
Short-term investments and cash	1,789		27
Other	(20)		7
Total investment income	5,664		17,618
Investment expenses	(1,018)		(2,469)
Net investment income	$	4,646	$	15,149

The Company’s gross investment income for mortgage loans for the three months ended March 31, 2023 and 2022 were as follows:



($ in thousands)	2023		2022
Retail	$	595	$	359

Commercial	494		210
Multi-family	117		69
Office	106		166

Hospitality	161		14
	$	1,473	$	818

Schedule of Accumulated Other Comprehensive Income (Loss)



($ in thousands)	2023		2022
Fixed maturity securities	$	9,786	$	(20,764)
Deferred income taxes	(2,045)		4,360
Total	$	7,741	$	(16,404)

Investments - Net Investment Losses (Gains) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Gross realized gains
Fixed maturity securities, available-for sale	$ 493	$ 16
Equity securities	1,227	1,830
Other	1	31
Total	1,721	1,877
Gross realized losses
Fixed maturity securities, available-for sale	(237)	(276)
Equity securities	(4,289)	(654)
Other	(1)	(16)
Total	(4,527)	(946)
Net unrealized gains (losses) on investments
Equity securities	3,745	(5,369)
Mortgage loans	22	0
Net investment gains (losses)	$ 961	$ (4,438)