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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________

Commission file number: 001-39392

TREAN INSURANCE GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 84-4512647
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
150 Lake Street West
Wayzata, MN 55391
(Address of principal executive offices and zip code)
 (952) 974-2200
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per shareTIGThe Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes     No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes ☒    No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," a "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.      
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes     No  
As of May 4, 2022, there were 51,192,196 shares of the registrant's common stock outstanding.


TREAN INSURANCE GROUP, INC.
TABLE OF CONTENTS
Page

2


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Trean Insurance Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
March 31, 2022December 31, 2021
Assets(unaudited)
Fixed maturities, at fair value (amortized cost of $464,502 and $465,459, respectively)
$447,349 $471,061 
Equity securities, at fair value (cost $34,119 and $984, respectively)
34,162 969 
Total investments481,511 472,030 
Cash and cash equivalents103,865 129,577 
Restricted cash478 407 
Accrued investment income2,610 2,344 
Premiums and other receivables153,053 141,920 
Income taxes receivable 460 
Reinsurance recoverable380,587 377,241 
Prepaid reinsurance premiums121,072 129,411 
Deferred policy acquisition cost, net15,547 13,344 
Property and equipment, net7,689 7,632 
Right of use asset4,167 4,530 
Goodwill142,347 142,347 
Intangible assets, net71,615 73,114 
Other assets10,173 8,658 
Total assets$1,494,714 $1,503,015 
Liabilities
Unpaid loss and loss adjustment expenses$550,981 $544,320 
Unearned premiums222,902 219,940 
Funds held under reinsurance agreements196,025 199,410 
Reinsurance premiums payable46,895 45,130 
Accounts payable and accrued expenses22,424 29,448 
Lease liability4,554 4,976 
Income taxes payable553  
Deferred tax liability3,991 7,520 
Debt29,992 30,362 
Total liabilities1,078,317 1,081,106 
Commitments and contingencies
Stockholders' equity
Common stock, $0.01 par value per share (600,000,000 authorized; 51,192,196 and 51,176,887 issued and outstanding as of March 31, 2022 and December 31, 2021, respectively)
512 512 
Additional paid-in capital288,771 288,623 
Retained earnings140,730 128,390 
Accumulated other comprehensive income (loss)(13,616)4,384 
Total stockholders' equity416,397 421,909 
Total liabilities and stockholders' equity$1,494,714 $1,503,015 

See accompanying notes to the condensed consolidated financial statements.
3

Trean Insurance Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)
Three Months Ended March 31,
20222021
Revenues
Gross written premiums$161,403 $146,730 
Increase in gross unearned premiums(2,864)(18,431)
Gross earned premiums158,539 128,299 
Ceded earned premiums(94,362)(87,165)
Net earned premiums64,177 41,134 
Net investment income2,576 2,272 
Net realized gains (losses)(1,047)13 
Other revenue3,201 4,655 
Total revenue68,907 48,074 
Expenses
Losses and loss adjustment expenses39,193 24,881 
General and administrative expenses18,300 11,891 
Intangible asset amortization1,499 1,414 
Noncash stock compensation156 211 
Interest expense408 427 
Total expenses59,556 38,824 
Gains on embedded derivatives6,236 2,676 
Other income23 121 
Income before taxes15,610 12,047 
Income tax expense3,270 2,605 
Net income$12,340 $9,442 
Earnings per share:
Basic$0.24 $0.18 
Diluted$0.24 $0.18 
Weighted average shares outstanding:
Basic51,177,908 51,148,782 
Diluted51,177,908 51,179,820 

See accompanying notes to the condensed consolidated financial statements.
4

Trean Insurance Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
Three Months Ended March 31,
20222021
Net income$12,340 $9,442 
Other comprehensive loss, net of tax:
Unrealized investment losses:
Unrealized investment losses arising during the period(23,804)(8,576)
Income tax benefit(4,993)(1,801)
Unrealized investment losses, net of tax(18,811)(6,775)
Less reclassification adjustments to:
Net realized investment gains (losses) included in net realized gains (losses)(1,027)13 
Income tax expense (benefit)(216)3 
Total reclassifications included in net income, net of tax(811)10 
Other comprehensive loss(18,000)(6,785)
Total comprehensive income (loss)$(5,660)$2,657 
See accompanying notes to the condensed consolidated financial statements.
5

Trean Insurance Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders' Equity and Redeemable Preferred Stock
For the Three Months Ended March 31, 2022 and 2021
(in thousands, except share and unit data)
(unaudited)


Common StockAdditional Paid in CapitalAccumulated Other Comprehensive Income (Loss)Retained EarningsTotal Stockholders' Equity
SharesAmount
Balance at December 31, 202151,176,887 $512 $288,623 $4,384 $128,390 $421,909 
Stock compensation expense— — 156 — — 156 
Common stock issued pursuant to equity compensation awards15,309  (8)— — (8)
Other comprehensive loss— — — (18,000)— (18,000)
Net income— — — — 12,340 12,340 
Balance at March 31, 202251,192,196 $512 $288,771 $(13,616)$140,730 $416,397 



Common StockAdditional Paid in CapitalAccumulated Other Comprehensive Income (Loss)Retained EarningsTotal Stockholders' Equity
SharesAmount
Balance at December 31, 202051,148,782 $511 $287,110 $13,426 $109,060 $410,107 
Stock compensation expense— — 211 — — 211 
Other comprehensive loss— — — (6,785)— (6,785)
Net income— — — — 9,442 9,442 
Balance at March 31, 202151,148,782 $511 $287,321 $6,641 $118,502 $412,975 


See accompanying notes to the condensed consolidated financial statements.
6

Trean Insurance Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended March 31,
20222021
Operating activities
Net income$12,340 $9,442 
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization1,675 1,690 
Stock compensation156 211 
Unrealized gains on embedded derivatives(6,896)(3,356)
Net (gains) losses on investments1,047 (24)
Bond amortization and accretion432 588 
Deferred income taxes1,249 95 
Deferred financing costs42 42 
Changes in operating assets and liabilities:
Accrued investment income(266)206 
Premiums and other receivables(11,133)(12,523)
Reinsurance recoverable on paid and unpaid losses(3,346)(17,698)
Prepaid reinsurance premiums8,339 (2,327)
Right of use asset363 494 
Other assets(3,718)(6,154)
Unpaid loss and loss adjustment expenses6,661 27,714 
Unearned premiums2,962 18,473 
Funds held under reinsurance agreements3,511 (8,869)
Reinsurance premiums payable1,765 (94)
Accounts payable and accrued expenses(7,025)(12,899)
Lease liability(423)(521)
Income taxes payable1,013 2,546 
Net cash provided by (used in) operating activities8,748 (2,964)
Investing activities
Payments for capital expenditures(232)(73)
Proceeds from sale of equity method investment 232 
Purchase of investments, available for sale(96,948)(37,678)
Proceeds from investments sold, matured or repaid63,211 20,391 
Net cash used in investing activities(33,969)(17,128)
Financing activities
Shares redeemed for payroll taxes(7) 
Principal payments on debt(413)(206)
Net cash used in financing activities(420)(206)
Net decrease in cash, cash equivalents and restricted cash(25,641)(20,298)
Cash, cash equivalents and restricted cash – beginning of period
129,984 157,234 
Cash, cash equivalents and restricted cash – end of period
$104,343 $136,936 
See accompanying notes to the condensed consolidated financial statements.
7

Trean Insurance Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
March 31,
Disaggregation of cash and restricted cash:20222021
Cash and cash equivalents$103,865 $130,940 
Restricted cash478 5,996 
Total cash, cash equivalents and restricted cash$104,343 $136,936 


Three Months Ended March 31,
Supplemental disclosure of cash flow information:20222021
Cash paid during the year for:
Interest$366 $385 
Income taxes1,002  
Non-cash investing and financing activity:
Right-of-use assets obtained in exchange for new operating lease liabilities146 2 
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases624 615 

See accompanying notes to the condensed consolidated financial statements.
8

Notes to the Condensed Consolidated Financial Statements

Note 1. Business and Basis of Presentation
Trean Insurance Group, Inc. (together with its wholly owned subsidiaries, the "Company") provides products and services to the specialty insurance market. Historically, the Company has focused on specialty casualty markets that are believed to be under-served and where the Company’s expertise allows the Company to achieve higher rates, such as niche workers' compensation markets and small- to medium-sized specialty casualty insurance programs. The Company underwrites specialty-casualty insurance products both through programs where the Company partners with other organizations ("Program Partners"), and also through Company owned managing general agencies ("Owned MGAs"). The Company also provides Program Partners with a variety of services, including issuing carrier services, claims administration, and reinsurance brokerage from which the Company generates fee-based revenues.

The Company's wholly owned subsidiaries include: (i) Benchmark Holding Company, a property and casualty insurance holding company, which owns Benchmark Insurance Company ("Benchmark"), a property and casualty insurance company domiciled in the state of Kansas, American Liberty Insurance Company ("ALIC"), a property and casualty insurance company domiciled in the state of Utah, 7710 Insurance Company ("7710"), a property and casualty insurance company domiciled in the state of South Carolina and Benchmark Specialty Insurance Company ("BSIC"), a property and casualty insurance company domiciled in the state of Arkansas; (ii) Trean Compstar Holdings, LLC, a limited liability company created originally for the purchase of Compstar Insurance Services LLC, a California-based general agency; and (iii) Trean Corporation ("Trean Corp"), a reinsurance intermediary manager and a managing general agent, which consists of the following wholly owned subsidiaries: (a) Trean Reinsurance Services, LLC ("TRS"), a reinsurance intermediary broker; Benchmark Administrators LLC (BIC Admin"), a claims third-party administrator; (b) Western Integrated Care, LLC ("WIC"), a managed care organization; and (c) Westcap Insurance Services, LLC ("Westcap"), a managing general agent based in California.

The accompanying condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to the Quarterly Report on Form 10-Q under the Securities Exchange Act of 1934. Accordingly, they do not contain all of the information included in the Company's annual consolidated financial statements and notes. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation of the Company’s condensed consolidated financial position and results of operations for the periods presented have been included. Although management believes the disclosures and information presented are adequate, these interim condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2021 (the "2021 Form 10-K"). Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

During the second quarter of 2021, the Company determined that its funds held agreements with reinsurers contain embedded derivatives relating to a total return swap on the underlying investments. As a result, the Company has revised the presentation of its financial results to report the change in fair value of the embedded derivatives in gains on embedded derivatives in the condensed consolidated statements of operations. In addition, investment earnings credited to the funds withheld accounts are reported in gains on embedded derivatives in the condensed consolidated statements of operations, whereas previously these were reported as an offset to net investment income. While the prior period amounts have been corrected for comparability, the correction was not material to the previously reported condensed consolidated financial statements. The impact of the prior period corrections on the condensed consolidated balance sheet and the related components of stockholders' equity is as follows:

December 31, 2020March 31, 2021
Previously reportedAdjustmentAs adjustedPreviously reportedAdjustmentAs adjusted
Retained earnings$112,959 $(3,899)$109,060 $119,750 $(1,248)$118,502 
Accumulated other comprehensive income9,527 3,899 13,426 5,393 1,248 6,641 



9


The impact of the prior period corrections on the condensed consolidated statements of operations and other comprehensive income is as follows:

Three Months Ended March 31, 2021
Previously reportedAdjustmentAs adjusted
Net investment income$1,592 $680 $2,272 
Total revenue47,394 680 48,074 
Gains on embedded derivatives 2,676 2,676 
Income before taxes8,691 3,356 12,047 
Income tax expense1,900 705 2,605 
Net income$6,791 $2,651 $9,442 
Earnings per share:
Basic$0.13 $0.05 $0.18 
Diluted$0.13 $0.05 $0.18 
Other comprehensive loss, net of tax
Unrealized investment losses:
Unrealized investment losses arising during the period$(5,220)$(3,356)$(8,576)
Income tax benefit(1,096)(705)(1,801)
Unrealized investment losses, net of tax(4,124)(2,651)(6,775)
Other comprehensive loss$(4,134)$(2,651)$(6,785)

The correction of the prior period amounts had no impact on total operating, investing, and financing activities as presented on the Company’s condensed consolidated statements of cash flows during the three months ended March 31, 2021. In conjunction with the correction of the prior period amounts; the net investment income table in Note 4 was corrected to incorporate the income from funds held investments of $680 for the three months ended March 31, 2021; the effective tax rate in Note 8 was corrected from 21.9% to 21.6% for the three months ended March 31, 2021; Note 13 has been corrected to reflect the changes to earning per share described above; and Note 14 has been corrected to reflect the changes to other comprehensive income described above.

Use of estimates

While preparing the condensed consolidated financial statements, the Company has made certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements, as well as reported amounts of revenue and expenses during the reporting period. Accordingly, actual results could differ from those estimates. Reported amounts that require extensive use of estimates include the reserves for unpaid losses and loss adjustment expenses ("LAE"), reinsurance recoverables, investments, goodwill, and other intangible assets. Except for the captions on the condensed consolidated balance sheets and condensed consolidated statements of comprehensive income, generally, the term loss(es) is used to collectively refer to both losses and LAE.

Accounting pronouncements

Recently adopted policies

In January 2020, the Financial Accounting Standards Board ("FASB") issued ASU No. 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivative and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323 and Topic 815 (ASU 2020-01). This update addresses the accounting for certain equity securities upon the application or discontinuation of the equity method of accounting. Further,
10

the update addresses scope considerations for forward contracts and purchased options on certain securities. ASU 2020-01 is effective for annual periods beginning after December 15, 2021, including interim periods thereafter. The Company adopted this standard effective January 1, 2022. Adoption of this standard did not have a material impact on the condensed consolidated financial statements.

Pending policies

The Company completed its IPO in July 2020, and is an emerging growth company as defined under federal securities laws. As such, the Company has elected to adopt pending accounting policies under the dates required for private companies. Therefore, the dates included within this section reflect the effective dates for the adoption of new accounting policies required by private companies.

In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments (ASU 2020-03). This update represents changes to clarify and improve the codification to allow for easier application by eliminating inconsistencies and providing clarification on items such as (i) the application of fair value option disclosures; (ii) the accounting for fees related to modifications of debt; and (iii) aligning the contractual term of a net investment in a lease in accordance with ASC Topic 326, Financial Instruments - Credit Losses, and the lease term determined in accordance with ASC Topic 842, Leases. The Company adopted items (i) and (ii) effective January 1, 2020 and will adopt item (iii) on January 1, 2023. Adoption of this standard has not had, and is not expected to have, a material impact on the condensed consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (ASU 2016-13). This update requires financial assets measured at amortized cost to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net income. Additionally, credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses, with the amount of the allowance limited to the amount by which the fair value is below the amortized cost. ASU 2016-13 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. The Company will adopt this standard effective January 1, 2023. The Company is currently evaluating the impact of this standard on the condensed consolidated financial statements.

Note 2. Acquisitions
Western Integrated Care

Effective July 6, 2021, Trean Corp acquired 100% ownership of WIC for a total purchase price of $5,500, which included $1,500 that is contingent on WIC's future earnings, as defined in the agreement. WIC is a managed care organization that offers services to workers' compensation insurers to enable employees who are injured on the job to access qualified medical treatment. The Company recorded $1,501 of goodwill and intangible assets of $3,624 associated with the business combination.


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Note 3. Fair Value Measurements

The Company’s financial instruments include assets and liabilities carried at fair value. The inputs to valuation techniques used to measure fair value are prioritized into a three level hierarchy. The fair value hierarchy is as follows:

Level 1: Fair values primarily based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2: Fair values primarily based on observable inputs, other than quoted prices included in Level 1, or based on prices for similar assets and liabilities.

Level 3: Fair values primarily based on valuations derived when one or more of the significant inputs are unobservable. With little or no observable market, the determination of fair value uses considerable judgment and represents the Company’s best estimate of an amount that could be realized in a market exchange for the asset or liability.

The Company classifies the financial asset or liability by level based upon the lowest level input that is significant to the determination of the fair value. The following tables present the estimated fair value of the Company’s significant financial instruments.

March 31, 2022
Level 1Level 2Level 3Total
Fixed maturities:
U.S. government and government securities$40,610 $ $ $40,610 
Foreign governments 393  393 
States, territories and possessions 10,822  10,822 
Political subdivisions of states territories and possessions 37,419  37,419 
Special revenue and special assessment obligations 94,078  94,078 
Industrial and public utilities 106,298  106,298 
Commercial mortgage-backed securities 97,267  97,267 
Residential mortgage-backed securities 18,800  18,800 
Other loan-backed securities 41,662  41,662 
Total fixed maturities40,610 406,739  447,349 
Equity securities14,053 20,109  34,162 
Total investments$54,663 $426,848 $ $481,511 
Embedded derivatives on funds held under reinsurance agreements$(1,070)$(5,555)$ $(6,625)
Debt 30,525  30,525 


12

December 31, 2021
Level 1Level 2Level 3Total
Fixed maturities:
U.S. government and government securities$2,392 $39,042 $ $41,434 
Foreign governments 2,490  2,490 
States, territories and possessions 10,766  10,766 
Political subdivisions of states, territories and possessions 40,002  40,002 
Special revenue and special assessment obligations 95,991  95,991 
Industrial and public utilities 103,257  103,257 
Commercial mortgage-backed securities 118,218  118,218 
Residential mortgage-backed securities 17,368  17,368 
Other loan-backed securities 41,425  41,425 
Hybrid securities 110  110 
Total fixed maturities2,392 468,669  471,061 
Equity securities 969  969 
Total investments$2,392 $469,638 $ $472,030 
Embedded derivatives on funds held under reinsurance agreements$(4)$275 $ $271 
Debt 30,938  30,938 

Fixed maturities and equity securities: The Company, through its third-party pricing service provider, uses a variety of sources to estimate the fair value of investments such as Refinitiv (formerly Reuters), PricingDirect, ICE Data Services, and for equities, Bloomberg or S&P Capital IQ Pro. Equity securities are generally valued at the closing price on the exchange on which they are primarily traded as provided by a third-party pricing service. Fixed income securities are generally valued at an evaluated bid as provided by a third-party pricing service. Securities and other assets generally valued using third-party pricing services may also be valued at broker/dealer indications. Values obtained from third-party pricing services can utilize several market data sources for inputs such as transaction data, yield, quality, coupon rate, maturity, issue type, trading characteristics, and other market activity. To validate the reasonableness of the prices, the Company performs various qualitative and quantitative procedures such as analysis of recent trading activity, analytical review of fair values and an evaluation of the underlying pricing methodologies. Based on these procedures, the Company did not adjust the prices or quotes from the third-party pricing service.

Embedded derivatives: The Company enters into funds held contracts under reinsurance agreements which create embedded derivatives on the underlying investments. These embedded derivatives are valued based upon the unrealized gain or loss position of the funds held portfolio, which is determined consistent with other investments using third-party pricing services. To validate the reasonableness of the quoted prices, the Company performs various qualitative and quantitative procedures such as analysis of recent activity, analytical review of fair values and an evaluation of the underlying pricing methodologies. Based on these procedures, the Company did not adjust the prices or quotes from the third-party pricing service.

Debt: The Company holds debt related to its secured credit facility. The Company has determined that the remaining balance of the debt reflected its fair value as this would represent the total amount to repay the debt.

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Note 4. Investments
Fixed maturity securities primarily include bonds and asset-backed securities. Fixed income securities, which may be sold prior to their contractual maturity, are designated as available-for-sale and are carried at fair value. Equity securities primarily include common stocks, mutual funds, and non-redeemable preferred stocks, which are carried at fair value. Equity securities includes non-redeemable preferred stock that were previously disclosed separately.

The cost or amortized cost, gross unrealized gains, gross unrealized losses, and estimated fair value of the Company's fixed maturities investments are as follows:

March 31, 2022
Cost or
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value
Fixed maturities:
U.S. government and government securities$42,026 $12 $(1,428)$40,610 
Foreign governments400  (7)393 
States, territories and possessions11,388 14 (580)10,822 
Political subdivisions of states, territories and possessions39,166 142 (1,889)37,419 
Special revenue and special assessment obligations98,436 493 (4,851)94,078 
Industrial and public utilities107,816 703 (2,221)106,298 
Commercial mortgage-backed securities104,291 37 (7,061)97,267 
Residential mortgage-backed securities19,040 83 (323)18,800 
Other loan-backed securities41,939 24 (301)41,662 
Hybrid securities    
Total fixed maturities available for sale$464,502 $1,508 $(18,661)$447,349 


December 31, 2021
Cost or
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value
Fixed maturities:
U.S. government and government securities$41,490 $113 $(169)$41,434 
Foreign governments2,500  (10)2,490 
States, territories and possessions10,593 189 (16)10,766 
Political subdivisions of states, territories and possessions39,170 975 (143)40,002 
Special revenue and special assessment obligations93,664 2,920 (593)95,991 
Industrial and public utilities100,774 2,835 (352)103,257 
Commercial mortgage-backed securities119,378 591 (1,751)118,218 
Residential mortgage-backed securities16,549 843 (24)17,368 
Other loan-backed securities41,236 248 (59)41,425 
Hybrid securities105 5  110 
Total fixed maturities available for sale$465,459 $8,719 $(3,117)$471,061 


14

The following table illustrates the Company’s gross unrealized losses and fair value of fixed maturities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

March 31, 2022
Less Than 12 Months12 Months or MoreTotal
Fair ValueUnrealized LossFair ValueUnrealized LossFair ValueUnrealized Loss
Fixed maturities:
U.S. government and government securities$37,166 $(1,352)$1,550 $(76)$38,716 $(1,428)
Foreign governments393 (7)  393 (7)
States, territories and possessions6,855 (529)274 (51)7,129 (580)
Political subdivisions of states, territories and possessions23,420 (1,866)277 (23)23,697 (1,889)
Special revenue and special assessment obligations56,698 (4,375)3,812 (476)60,510 (4,851)
Industrial and public utilities47,899 (2,022)1,547 (199)49,446 (2,221)
Commercial mortgage-backed securities60,033 (3,636)34,197 (3,425)94,230 (7,061)
Residential mortgage-backed securities10,045 (323)  10,045 (323)
Other loan-backed securities33,037 (242)2,885 (59)35,922 (301)
Total fixed maturities$275,546 $(14,352)$44,542 $(4,309)$320,088 $(18,661)


December 31, 2021
Less Than 12 Months12 Months or MoreTotal
Fair ValueUnrealized LossFair ValueUnrealized LossFair ValueUnrealized Loss
Fixed maturities:
U.S. government and government securities$26,935 $(168)$23 $(1)$26,958 $(169)
Foreign governments2,490 (10)  2,490 (10)
States, territories and possessions935 (16)  935 (16)
Political subdivisions of states, territories and possessions11,115 (143)  11,115 (143)
Special revenue and special assessment obligations29,917 (593)  29,917 (593)
Industrial and public utilities24,042 (286)1,058 (66)25,100 (352)
Commercial mortgage-backed securities80,126 (1,565)6,212 (186)86,338 (1,751)
Residential mortgage-backed securities4,539 (24)  4,539 (24)
Other loan-backed securities20,153 (36)2,477 (23)22,630 (59)
Total fixed maturities$200,252 $(2,841)$9,770 $(276)$210,022 $(3,117)


The unrealized losses on the Company’s available for sale securities as of March 31, 2022 and December 31, 2021 were primarily attributable to an increase in interest rates, which predominantly impacted fixed maturities acquired since the second quarter of 2020.

15

The amortized cost and estimated fair value of fixed maturities as of March 31, 2022, by contractual maturity, are as follows:
Cost or Amortized CostFair Value
Available for sale:
Due in one year or less$33,559 $33,669 
Due after one year but before five years110,891 108,584 
Due after five years but before ten years90,397 86,968 
Due after ten years