0001823529-23-000088 | 10-Q | XBRL Viewer

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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 $5,337,054 and $5,371,673 as of March 31, 2023, and December 31, 2022, respectively)	$ 4,929,627	$ 4,884,760
Short-term investments, at fair value	2,185	3,047
Total investments	4,931,812	4,887,807
Cash and cash equivalents	621,621	513,775
Accrued investment income	35,945	35,844
Deferred acquisition costs	25,954	26,121
Premiums receivable (net of allowance for credit losses of $868 and $873 as of March 31, 2023, and December 31, 2022, respectively)	42,005	41,738
Other assets	77,026	76,391
Deferred tax asset	107,868	127,473
Total assets	5,842,231	5,709,149
Liabilities:
Loss reserves	501,427	519,008
Unearned premiums	188,680	202,717
Other liabilities	112,043	143,686
Long-term borrowings	743,460	742,830
Total liabilities	1,545,610	1,608,241
Equity:
Common stock ($0.01 par value; 600,000 shares authorized; 161,938 shares issued and outstanding as of March 31, 2023, and 162,779 shares issued and outstanding as of December 31, 2022)	1,619	1,628
Additional paid-in capital	2,362,281	2,382,068
Accumulated other comprehensive income	(320,242)	(382,744)
Retained earnings	2,252,963	2,099,956
Total equity	4,296,621	4,100,908
Total liabilities and equity	$ 5,842,231	$ 5,709,149

Changes in accumulated other comprehensive income (Tables)

3 Months Ended

Mar. 31, 2023

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The following tables present a roll forward of accumulated other comprehensive income for the three months indicated:


(Amounts in thousands)	Net unrealized investment gains (losses)		Foreign currency translation		Total
Balance as of January 1, 2023, net of tax	$	(382,896)	$	152	$	(382,744)

Other comprehensive income (loss) before reclassifications	62,414		(8)		62,406
Amounts reclassified from other comprehensive income (loss)	96		—		96
Total other comprehensive income (loss)	62,510		(8)		62,502
Balance as of March 31, 2023, net of tax	$	(320,386)	$	144	$	(320,242)

(Amounts in thousands)	Net unrealized investment gains (losses)		Foreign currency translation		Total
Balance as of January 1, 2022, net of tax	$	83,588	$	(7)	$	83,581

Other comprehensive income (loss) before reclassifications	(223,896)		29		(223,867)
Amounts reclassified from other comprehensive income (loss)	(404)		—		(404)
Total other comprehensive income (loss)	(224,300)		29		(224,271)
Balance as of March 31, 2022, net of tax	$	(140,712)	$	22	$	(140,690)

Reclassification out of Accumulated Other Comprehensive Income

The following table presents the effect of the reclassifications of significant items out of accumulated other comprehensive income on the respective line items of the consolidated statements of income, for the periods indicated:


	Amount reclassified from accumulated other comprehensive income				Affected line item in the condensed consolidated statements of income
	Three months ended March 31,
(Amounts in thousands)	2023		2022
Net unrealized gains (losses) on investments	$	(122)	$	(512)		Net investment gains (losses)
Benefit (expense) from income taxes	26		108			Provision for income taxes

Investments - Summary of Contractual Maturities of Fixed Maturity Securities Available-For-Sale (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Amortized cost
Due one year or less	$ 187,395
Due after one year through five years	2,323,642
Due after five years through ten years	1,386,185
Due after ten years	232,482
Subtotal	4,129,704
Amortized cost	5,337,054	$ 5,371,673
Fair value
Due one year or less	185,488
Due after one year through five years	2,186,748
Due after five years through ten years	1,218,687
Due after ten years	203,044
Subtotal	3,793,967
Fair value	4,929,627	4,884,760
Residential mortgage-backed
Amortized cost
Residential mortgage-backed and other asset-backed, amortization	10,448
Amortized cost	10,448	11,162
Fair value
Residential mortgage-backed and other asset-backed, fair value	10,344
Fair value	10,344	11,043
Other asset-backed
Amortized cost
Residential mortgage-backed and other asset-backed, amortization	1,196,902
Amortized cost	1,196,902	1,185,048
Fair value
Residential mortgage-backed and other asset-backed, fair value	1,125,316
Fair value	$ 1,125,316	$ 1,100,036

Fair value - Schedule of Estimated Fair Value Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Carrying amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term borrowings	$ 743,460	$ 742,830
Fair value \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term borrowings	$ 733,298	$ 739,020

Fair value - Summary of Fair Value Assets Measured on Recurring Basis, Significant Unobservable Input (Details) $ in Thousands	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value	$ 4,929,627	$ 4,884,760
U.S. corporate
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value	2,679,485	2,646,863
Non-U.S. corporate
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value	630,502	652,844
Fair value, recurring
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value	4,929,627	4,884,760
Fair value, recurring \| U.S. corporate
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value	2,679,485	2,646,863
Fair value, recurring \| Non-U.S. corporate
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value	$ 630,502	652,844
Level 3 \| U.S. corporate \| Internal models \| Credit spreads \| Minimum
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fixed maturity securities, measurement input (in basis points)	0.0071
Level 3 \| U.S. corporate \| Internal models \| Credit spreads \| Maximum
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fixed maturity securities, measurement input (in basis points)	0.0357
Level 3 \| U.S. corporate \| Internal models \| Credit spreads \| Weighted average
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fixed maturity securities, measurement input (in basis points)	0.0159
Level 3 \| Non-U.S. corporate \| Internal models \| Credit spreads \| Minimum
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fixed maturity securities, measurement input (in basis points)	0.0100
Level 3 \| Non-U.S. corporate \| Internal models \| Credit spreads \| Maximum
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fixed maturity securities, measurement input (in basis points)	0.0215
Level 3 \| Non-U.S. corporate \| Internal models \| Credit spreads \| Weighted average
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fixed maturity securities, measurement input (in basis points)	0.0152
Level 3 \| Fair value, recurring
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value	$ 291,445	319,261
Level 3 \| Fair value, recurring \| Internal models
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value	288,300
Level 3 \| Fair value, recurring \| U.S. corporate
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value	216,330	220,626
Level 3 \| Fair value, recurring \| U.S. corporate \| Internal models
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value	214,141
Level 3 \| Fair value, recurring \| Non-U.S. corporate
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value	74,131	$ 95,154
Level 3 \| Fair value, recurring \| Non-U.S. corporate \| Internal models
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value	$ 74,131

Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2023	May 01, 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	001-40399
Entity Registrant Name	Enact Holdings, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-1579166
Entity Address, Address Line One	8325 Six Forks Road
Entity Address, City or Town	Raleigh
Entity Address, State or Province	NC
Entity Address, Postal Zip Code	27615
City Area Code	919
Local Phone Number	846-4100
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	ACT
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		161,580,827
Entity Central Index Key	0001823529
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false

Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenues:
Premiums	$ 235,108	$ 234,279
Net investment income	45,341	35,146
Net investment gains (losses)	(122)	(339)
Other income	612	502
Total revenues	280,939	269,588
Losses and expenses:
Losses incurred	(10,984)	(10,446)
Acquisition and operating expenses, net of deferrals	51,705	54,262
Amortization of deferred acquisition costs and intangibles	2,640	3,090
Interest expense	13,065	12,776
Total losses and expenses	56,426	59,682
Income before income taxes	224,513	209,906
Provision for income taxes	48,525	45,276
Net income	$ 175,988	$ 164,630
Net income per common share:
Basic (in usd per share)	$ 1.08	$ 1.01
Diluted (in usd per share)	$ 1.08	$ 1.01
Weighted average common shares outstanding:
Basic (in shares)	162,442	162,841
Diluted (in shares)	163,179	163,054

Net income per common share - Schedule of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share [Abstract]
Net income available to EHI common stockholders	$ 175,988	$ 164,630
Net income per common share, basic (in usd per share)	$ 1.08	$ 1.01
Net income per common share, diluted (in usd per share)	$ 1.08	$ 1.01
Weighted average common shares outstanding - basic (in shares)	162,442	162,841
Weighted average common shares outstanding - diluted (in shares)	163,179	163,054

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

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-Section 50
-Paragraph 3
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22583-107794

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

+ Details

Nature of business, organization structure and basis of presentation (Details) - state	1 Months Ended
	Sep. 30, 2021	Mar. 31, 2023
Equity, Class of Treasury Stock [Line Items]
Number of states in which entity operates		50
IPO
Equity, Class of Treasury Stock [Line Items]
Minority initial public offering, percentage	18.40%

Related party transactions - Narrative (Details) - Genworth Holdings, Inc. - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Corporate Expenses
Related Party Transaction [Line Items]
Administrative and operating expenses	$ 4.7	$ 7.8
Investment Expenses
Related Party Transaction [Line Items]
Expenses from transactions with related party	1.6	1.4
Information Technology and Administrative Services
Related Party Transaction [Line Items]
Other revenues from transactions with related party	$ 0.1	$ 0.2

Income taxes	3 Months Ended
Income taxes	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Income taxes	Income taxes We compute the provision for income taxes on a separate return with benefits-for-loss method. If during the three-month periods ended March 31, 2023 and 2022, we had computed taxes using the separate return method, the provision for income taxes would have been unchanged.

- 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
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
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-Section 50
-Paragraph 17
-Subparagraph (b)
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
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-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
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-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: 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(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Reinsurance (Tables)

3 Months Ended

Mar. 31, 2023

SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract]

Effects of Reinsurance

The following table sets forth the effects of reinsurance on premiums written and earned for the periods indicated:


	Three months ended March 31,
(Amounts in thousands)	2023		2022
Net premiums written:
Direct	$	240,939	$	242,605
Assumed	59		68
Ceded	(19,927)		(18,302)
Net premiums written	$	221,071	$	224,371

Net premiums earned:
Direct	$	254,976	$	252,513
Assumed	59		68
Ceded	(19,927)		(18,302)
Net premiums earned	$	235,108	$	234,279

Schedule of Retained Aggregate Loss and Reinsurance Coverage

The following table presents the issue date, policy dates, initial and current first layer retained aggregate loss and initial and current reinsurance coverage amount under each reinsurance transaction. Current amounts are presented as of March 31, 2023:


Mortgage insurance-linked notes
(Amounts in millions)	Issue date	Policy dates	Initial first layer retained loss	Current first layer retained loss	Initial reinsurance coverage	Current reinsurance coverage
Triangle Re 2020-1 Ltd.	10/22/2020	1/01/2020 - 8/31/2020	$522	$521	$350	$47
Triangle Re 2021-1 Ltd.	3/02/2021	1/01/2014 - 12/31/2018, 10/01/2019 - 12/31/2019	$212	$212	$495	$126
Triangle Re 2021-2 Ltd.	4/16/2021	9/01/2020 - 12/31/2020	$189	$188	$303	$227
Triangle Re 2021-3 Ltd.	9/02/2021	1/01/2021 - 6/30/2021	$304	$303	$372	$328
Total						$728

Traditional excess-of-loss reinsurance
(Amounts in millions)	Issue date	Policy dates	Initial first layer retained loss	Current first layer retained loss	Initial reinsurance coverage	Current reinsurance coverage
2020 XOL	1/01/2020	1/01/2020 - 12/31/2020	$691	$691	$168	$44
2021 XOL	2/04/2021	1/01/2021 - 12/31/2021	$671	$671	$206	$180
2022-1 XOL	1/27/2022	1/01/2022 - 12/31/2022	$462	$462	$196	$196
2022-2 XOL	1/27/2022	1/01/2022 - 12/31/2022	$385	$385	$25	$25
2022-3 XOL	3/24/2022	7/01/2021 - 12/31/2021	$317	$317	$289	$281
2022-4 XOL	3/24/2022	7/01/2021 - 12/31/2021	$264	$264	$36	$36
2022-5 XOL	9/15/2022	1/01/2022 - 6/30/2022	$256	$256	$201	$193
2023-1 XOL	3/08/2023	1/01/2023 - 12/31/2023	$98	$98	$43	$43
Total						$998

Loss reserves (Tables)

3 Months Ended

Mar. 31, 2023

Insurance [Abstract]

Schedule of Liability for Loss Reserves

Activity for the liability for loss reserves for the three months ended March 31, is summarized as follows:


(Amounts in thousands)	2023		2022
Loss reserves, beginning balance	$	519,008	$	641,325
Run-off reserves	(678)		(681)
Net loss reserves, beginning balance	518,330		640,644

Losses and LAE incurred related to current accident year	60,298		41,274
Losses and LAE incurred related to prior accident years	(71,329)		(51,707)
Total incurred (1)	(11,031)		(10,433)

Losses and LAE paid related to current accident year	(137)		(4)
Losses and LAE paid related to prior accident years	(6,516)		(5,613)
Total paid (1)	(6,653)		(5,617)

Net loss reserves, ending balance	500,646		624,594
Run-off reserves	781		685
Loss reserves, ending balance	$	501,427	$	625,279

______________

(1)Losses and loss adjustment expenses (“LAE”) incurred and paid exclude losses related to our run-off business.

Fair value - Schedule of Additional Information about Fair Value Assets Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	$ 319,261	$ 328,620
Total realized and unrealized gains (losses) included in net income	(735)	(99)
Total realized and unrealized gains (losses) included in OCI	6,805	(23,745)
Purchases	6,759	49,969
Sales	(10,442)	0
Settlements	(27,689)	(546)
Transfer into Level 3	0	0
Transfer out of Level 3	(2,514)	(26,318)
Ending Balance	291,445	327,881
Total gains (losses) attributable to assets still held included in net income	2	(99)
Total gains (losses) attributable to assets still held included in OCI	5,177	(21,828)
U.S. corporate
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	220,626	220,733
Total realized and unrealized gains (losses) included in net income	(13)	(15)
Total realized and unrealized gains (losses) included in OCI	4,024	(16,784)
Purchases	3,000	39,969
Sales	(6,899)	0
Settlements	(4,408)	(440)
Transfer into Level 3	0	0
Transfer out of Level 3	0	0
Ending Balance	216,330	243,463
Total gains (losses) attributable to assets still held included in net income	(9)	(15)
Total gains (losses) attributable to assets still held included in OCI	3,749	(16,784)
Non-U.S. corporate
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	95,154	83,664
Total realized and unrealized gains (losses) included in net income	(725)	(84)
Total realized and unrealized gains (losses) included in OCI	2,767	(5,337)
Purchases	3,759	10,000
Sales	(3,543)	0
Settlements	(23,281)	(106)
Transfer into Level 3	0	0
Transfer out of Level 3	0	(3,719)
Ending Balance	74,131	84,418
Total gains (losses) attributable to assets still held included in net income	8	(84)
Total gains (losses) attributable to assets still held included in OCI	1,432	(5,044)
Other asset-backed
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	3,481	24,223
Total realized and unrealized gains (losses) included in net income	3	0
Total realized and unrealized gains (losses) included in OCI	14	(1,624)
Purchases	0	0
Sales	0	0
Settlements	0	0
Transfer into Level 3	0	0
Transfer out of Level 3	(2,514)	(22,599)
Ending Balance	984	0
Total gains (losses) attributable to assets still held included in net income	3	0
Total gains (losses) attributable to assets still held included in OCI	$ (4)	$ 0

Changes in accumulated other comprehensive income - Reclassification out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Benefit (expense) from income taxes	$ (48,525)	$ (45,276)
Reclassification out of Accumulated Other Comprehensive Income \| Amount reclassified from accumulated other comprehensive income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net unrealized gains (losses) on investments	(122)	(512)
Benefit (expense) from income taxes	$ 26	$ 108

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Net income per common share

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Net income per common share

The basic earnings per share computation is based on the weighted average number of shares of common stock outstanding. For the three months ended March 31, 2023 and 2022, the calculation of dilutive weighted average shares considers the impact of restricted stock units and performance stock units issued to employees as well as deferred stock units issued to our directors.

The calculation of basic and diluted net income per share is as follows:


	Three months ended March 31,
(Amounts in thousands, except per share amounts)	2023		2022
Net income available to EHI common stockholders	$	175,988	$	164,630
Net income per common share:
Basic	$	1.08	$	1.01
Diluted	$	1.08	$	1.01
Weighted average common shares outstanding:
Basic	162,442		162,841
Diluted	163,179		163,054

Related party transactions

3 Months Ended

Mar. 31, 2023

Related party transactions

We have various agreements with Genworth that provide for reimbursement to and from Genworth of certain administrative and operating expenses that include, but are not limited to, information technology services and administrative services (such as finance, human resources and employee benefit administration). These agreements provide for an allocation of corporate expenses to all Genworth businesses or subsidiaries. We incurred costs for these services of $4.7 million and $7.8 million for the three months ended March 31, 2023 and 2022, respectively.

The investment portfolios of our insurance subsidiaries are managed by Genworth. Under the terms of the investment management agreement, we are charged a fee by Genworth. All fees paid to Genworth are charged to investment expense and are included in net investment income in the condensed consolidated statements of income. The total investment expenses paid to Genworth were $1.6 million and $1.4 million for the three months ended March 31, 2023 and 2022, respectively.

Our employees participate in certain benefit plans sponsored by Genworth and certain share-based compensation plans that utilize shares of Genworth common stock and other incentive plans.

We provide certain information technology and administrative services (such as facilities and maintenance) to Genworth. We charged Genworth $0.1 million and $0.2 million for these services for the three months ended March 31, 2023 and 2022, respectively.

We have a tax sharing agreement in place with Genworth, such that we participate in a single U.S. consolidated income tax return filing. All intercompany balances related to this agreement are settled at least annually.

The condensed consolidated financial statements include the following amounts due to and from Genworth relating to recurring service and expense agreements as of:


(Amounts in thousands)	March 31, 2023		December 31, 2022
Amounts payable to Genworth	$	8,910	$	9,291
Amounts receivable from Genworth	$	153	$	167

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities:
Net income	$ 175,988	$ 164,630
Adjustments to reconcile net income to net cash provided by operating activities:
Net investment losses	122	339
Amortization of fixed maturity securities discounts and premiums	(657)	(961)
Amortization of deferred acquisition costs and intangibles	2,640	3,090
Acquisition costs deferred	(1,546)	(1,629)
Deferred income taxes	2,626	2,943
Stock-based compensation expense	2,179	2,715
Amortization of debt issuance costs	630	588
Other	0	(8)
Change in certain assets and liabilities:
Accrued investment income	(101)	(1,504)
Premiums receivable	(267)	1,885
Other assets	986	2,874
Loss reserves	(17,581)	(16,046)
Unearned premiums	(14,037)	(9,909)
Other liabilities	(31,643)	11,822
Net cash provided by operating activities	119,339	160,829
Cash flows from investing activities:
Purchases of fixed maturity securities available-for-sale	(121,118)	(351,130)
Proceeds from sales of fixed maturity securities available-for-sale	19,544	90,422
Proceeds from maturities of fixed maturity securities available-for-sale	136,776	114,211
Net change in short-term investments	863	0
Other	(2,602)	0
Net cash provided by (used in) investing activities	33,463	(146,497)
Cash flows from financing activities:
Repurchase of common stock	(22,200)	0
Dividends paid	(22,756)	0
Net cash used in financing activities	(44,956)	0
Net increase in cash and cash equivalents	107,846	14,332
Cash and cash equivalents at beginning of period	513,775	425,828
Cash and cash equivalents at end of period	$ 621,621	$ 440,160

Investments - Net Investment Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Net Investment Income [Line Items]
Gross investment income before expenses and fees	$ 46,995	$ 36,544
Investment expenses and fees	(1,654)	(1,398)
Net investment income	45,341	35,146
Fixed maturity securities available-for-sale
Net Investment Income [Line Items]
Gross investment income before expenses and fees	41,375	36,534
Cash, cash equivalents and short-term investments
Net Investment Income [Line Items]
Gross investment income before expenses and fees	$ 5,620	$ 10

Investments - Change in Net Unrealized Gains (Losses) on Available-for-Sale Securities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Roll Forward]
Beginning balance	$ 4,100,908	$ 4,105,523
Change in net unrealized investment gains (losses)	62,510	(224,300)
Ending balance	4,296,621	4,048,589
Reclassification adjustments to net investment (gains) losses, tax	(26)	(108)
Amount reclassified from accumulated other comprehensive income
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Roll Forward]
Beginning balance	(382,896)	83,588
Unrealized gains (losses) on investment securities	79,366	(285,401)
Provision for income taxes	(16,952)	60,697
Change in unrealized gains (losses) on investment securities	62,414	(224,704)
Reclassification adjustments to net investment (gains) losses, net of taxes of $(26) and $(108), respectively	96	404
Change in net unrealized investment gains (losses)	62,510	(224,300)
Ending balance	$ (320,386)	$ (140,712)

- 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.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 852
-SubTopic 10
-Section 55
-Paragraph 10
-URI https://asc.fasb.org/extlink&oid=84165509&loc=d3e56426-112766

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 4.E)
-URI https://asc.fasb.org/extlink&oid=122038336&loc=d3e74512-122707

Reference 4: 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(31))
-URI https://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 5: 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(29))
-URI https://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(30))
-URI https://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=123596393&loc=d3e14064-108612

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=114001798&loc=d3e33918-111571

+ Details

Investments - Schedule of Fixed Maturity Securities in a Continuous Unrealized Loss Position (Details) $ in Thousands	Mar. 31, 2023 USD ($) security	Dec. 31, 2022 USD ($) security
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract]
Less than 12 months, Fair value	$ 1,737,085	$ 3,434,023
Less than 12 months, Gross unrealized losses	$ (43,285)	$ (241,056)
Less than 12 months, Number of securities \| security	501,000	877,000
12 months or more, Fair value	$ 2,922,153	$ 1,305,006
12 months or more, Gross unrealized losses	$ (370,856)	$ (249,706)
12 months or more, Number of securities \| security	557,000	238,000
Fair value	$ 4,659,238	$ 4,739,029
Gross unrealized losses	$ (414,141)	$ (490,762)
Number of securities \| security	1,058,000	1,115,000
U.S. government, agencies and GSEs
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract]
Less than 12 months, Fair value	$ 9,024	$ 43,873
Less than 12 months, Gross unrealized losses	$ (187)	$ (1,600)
Less than 12 months, Number of securities \| security	6,000	18,000
12 months or more, Fair value	$ 32,152	$ 96
12 months or more, Gross unrealized losses	$ (975)	$ (9)
12 months or more, Number of securities \| security	11,000	1,000
Fair value	$ 41,176	$ 43,969
Gross unrealized losses	$ (1,162)	$ (1,609)
Number of securities \| security	17,000	19,000
State and political subdivisions
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract]
Less than 12 months, Fair value	$ 30,891	$ 203,752
Less than 12 months, Gross unrealized losses	$ (1,835)	$ (40,988)
Less than 12 months, Number of securities \| security	6,000	43,000
12 months or more, Fair value	$ 380,669	$ 196,235
12 months or more, Gross unrealized losses	$ (79,482)	$ (56,906)
12 months or more, Number of securities \| security	82,000	46,000
Fair value	$ 411,560	$ 399,987
Gross unrealized losses	$ (81,317)	$ (97,894)
Number of securities \| security	88,000	89,000
Non-U.S. government
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract]
Less than 12 months, Fair value	$ 0	$ 0
Less than 12 months, Gross unrealized losses	$ 0	$ 0
Less than 12 months, Number of securities \| security	0	0
12 months or more, Fair value	$ 9,493	$ 9,349
12 months or more, Gross unrealized losses	$ (1,078)	$ (1,258)
12 months or more, Number of securities \| security	1,000	1,000
Fair value	$ 9,493	$ 9,349
Gross unrealized losses	$ (1,078)	$ (1,258)
Number of securities \| security	1,000	1,000
U.S. corporate
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract]
Less than 12 months, Fair value	$ 1,104,499	$ 2,033,713
Less than 12 months, Gross unrealized losses	$ (28,535)	$ (131,150)
Less than 12 months, Number of securities \| security	292,000	468,000
12 months or more, Fair value	$ 1,445,412	$ 568,171
12 months or more, Gross unrealized losses	$ (177,188)	$ (109,611)
12 months or more, Number of securities \| security	245,000	92,000
Fair value	$ 2,549,911	$ 2,601,884
Gross unrealized losses	$ (205,723)	$ (240,761)
Number of securities \| security	537,000	560,000
Non-U.S. corporate
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract]
Less than 12 months, Fair value	$ 255,688	$ 486,117
Less than 12 months, Gross unrealized losses	$ (6,862)	$ (35,515)
Less than 12 months, Number of securities \| security	77,000	125,000
12 months or more, Fair value	$ 338,163	$ 155,345
12 months or more, Gross unrealized losses	$ (45,174)	$ (28,132)
12 months or more, Number of securities \| security	63,000	27,000
Fair value	$ 593,851	$ 641,462
Gross unrealized losses	$ (52,036)	$ (63,647)
Number of securities \| security	140,000	152,000
Residential mortgage-backed
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract]
Less than 12 months, Fair value	$ 9,377	$ 11,043
Less than 12 months, Gross unrealized losses	$ (106)	$ (119)
Less than 12 months, Number of securities \| security	5,000	6,000
12 months or more, Fair value	$ 0	$ 0
12 months or more, Gross unrealized losses	$ 0	$ 0
12 months or more, Number of securities \| security	0	0
Fair value	$ 9,377	$ 11,043
Gross unrealized losses	$ (106)	$ (119)
Number of securities \| security	5,000	6,000
Other asset-backed
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract]
Less than 12 months, Fair value	$ 327,606	$ 655,525
Less than 12 months, Gross unrealized losses	$ (5,760)	$ (31,684)
Less than 12 months, Number of securities \| security	115,000	217,000
12 months or more, Fair value	$ 716,264	$ 375,810
12 months or more, Gross unrealized losses	$ (66,959)	$ (53,790)
12 months or more, Number of securities \| security	155,000	71,000
Fair value	$ 1,043,870	$ 1,031,335
Gross unrealized losses	$ (72,719)	$ (85,474)
Number of securities \| security	270,000	288,000

Investments

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Investments

Net Investment Income

Sources of net investment income were as follows for the periods indicated:


	Three months ended March 31,
(Amounts in thousands)	2023		2022
Fixed maturity securities available-for-sale	$	41,375	$	36,534
Cash, cash equivalents and short-term investments	5,620		10
Gross investment income before expenses and fees	46,995		36,544
Investment expenses and fees	(1,654)		(1,398)
Net investment income	$	45,341	$	35,146

Net Investment Gains (Losses)

The following table sets forth net investment gains (losses) for the periods indicated:


	Three months ended March 31,
(Amounts in thousands)	2023		2022
Fixed maturity securities available-for-sale:
Gross realized gains	$	—	$	350
Gross realized (losses)	(122)		(862)
Net realized gains (losses)	(122)		(512)
Net change in allowance for credit losses on fixed maturity securities available-for-sale	—		173

Net investment gains (losses)	$	(122)	$	(339)

There was no allowance for credit losses recorded on fixed maturity securities classified as available-for-sale as of March 31, 2023 or December 31, 2022 or activity during the three months ended March 31, 2023.

Unrealized Investment Gains (Losses)

Net unrealized gains and losses on available-for-sale securities reflected as a separate component of accumulated other comprehensive income (“AOCI”) were as follows as of the dates indicated:


(Amounts in thousands)	March 31, 2023		December 31, 2022
Net unrealized gains (losses) on investment securities:
Fixed maturity securities	$	(407,427)	$	(486,913)
Short-term investments	(29)		(30)
Unrealized gains (losses) on investment securities	(407,456)		(486,943)
Income taxes	87,070		104,047
Net unrealized investment gains (losses)	$	(320,386)	$	(382,896)

The change in net unrealized gains (losses) on available-for-sale securities reported in accumulated other comprehensive income was as follows as of and for the periods indicated:


	Three months ended March 31,
(Amounts in thousands)	2023		2022
Beginning balance	$	(382,896)	$	83,588

Unrealized gains (losses) arising during the period:
Unrealized gains (losses) on investment securities	79,366		(285,401)
Provision for income taxes	(16,952)		60,697
Change in unrealized gains (losses) on investment securities	62,414		(224,704)
Reclassification adjustments to net investment (gains) losses, net of taxes of $(26) and $(108), respectively	96		404
Change in net unrealized investment gains (losses)	62,510		(224,300)
Ending balance	$	(320,386)	$	(140,712)

Amounts reclassified out of accumulated other comprehensive income to net investment gains (losses) include realized gains (losses) on sales of securities, which are determined on a specific identification basis.

Fixed Maturity Securities Available-For-Sale

As of March 31, 2023, the amortized cost, gross unrealized gains (losses) and fair value of our investment securities were as follows:


(Amounts in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
U.S. government, agencies and GSEs	$	43,772	$	99	$	(1,162)	$	42,709
State and political subdivisions	510,953		2,142		(81,317)		431,778
Non-U.S. government	10,571		—		(1,078)		9,493
U.S. corporate	2,882,422		2,786		(205,723)		2,679,485
Non-U.S. corporate	681,986		552		(52,036)		630,502
Residential mortgage-backed	10,448		2		(106)		10,344
Other asset-backed	1,196,902		1,133		(72,719)		1,125,316
Total fixed maturity securities available-for-sale	$	5,337,054	$	6,714	$	(414,141)	$	4,929,627
Short-term investments	2,214		—		(29)		2,185
Total investments	$	5,339,268	$	6,714	$	(414,170)	$	4,931,812

As of December 31, 2022, the amortized cost, gross unrealized gains (losses) and fair value of our investment securities were as follows:


(Amounts in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
U.S. government, agencies and GSEs	$	46,319	$	59	$	(1,609)	$	44,769
State and political subdivisions	515,935		1,815		(97,894)		419,856
Non-U.S. government	10,607		—		(1,258)		9,349
U.S. corporate	2,886,269		1,355		(240,761)		2,646,863
Non-U.S. corporate	716,333		158		(63,647)		652,844
Residential mortgage-backed	11,162		—		(119)		11,043
Other asset-backed	1,185,048		462		(85,474)		1,100,036
Total fixed maturity securities available-for-sale	$	5,371,673	$	3,849	$	(490,762)	$	4,884,760
Short-term investments	3,077		—		(30)		3,047
Total investments	$	5,374,750	$	3,849	$	(490,792)	$	4,887,807

Gross Unrealized Losses and Fair Values of Fixed Maturity Securities Available-For-Sale

The following table presents the gross unrealized losses and fair values of our fixed maturity securities for which an allowance for credit losses has not been recorded, aggregated by investment type and length of time that individual fixed maturity securities have been in a continuous unrealized loss position, as of March 31, 2023:


	Less than 12 months					12 months or more					Total
(Amounts in thousands)	Fair value		Gross unrealized losses		Number of securities	Fair value		Gross unrealized losses		Number of securities	Fair value		Gross unrealized losses		Number of securities
Fixed maturity securities:
U.S. government, agencies and GSEs	$	9,024	$	(187)	6	$	32,152	$	(975)	11	$	41,176	$	(1,162)	17
State and political subdivisions	30,891		(1,835)		6	380,669		(79,482)		82	411,560		(81,317)		88
Non-U.S. government	—		—		—	9,493		(1,078)		1	9,493		(1,078)		1
U.S. corporate	1,104,499		(28,535)		292	1,445,412		(177,188)		245	2,549,911		(205,723)		537
Non-U.S. corporate	255,688		(6,862)		77	338,163		(45,174)		63	593,851		(52,036)		140
Residential mortgage-backed	9,377		(106)		5	—		—		—	9,377		(106)		5
Other asset-backed	327,606		(5,760)		115	716,264		(66,959)		155	1,043,870		(72,719)		270
Total for fixed maturity securities in an unrealized loss position	$	1,737,085	$	(43,285)	501	$	2,922,153	$	(370,856)	557	$	4,659,238	$	(414,141)	1,058

We did not recognize an allowance for credit losses on securities in an unrealized loss position included in the table above. Based on a qualitative and quantitative review of the issuers of the securities, we believe the unrealized losses are largely due to changes in interest rates and recent market volatility, and are not indicative of credit losses. The issuers continue to make timely principal and interest payments.

For all securities in an unrealized loss position without an allowance for credit losses, we expect to recover the amortized cost based on our estimate of the amount and timing of cash flows to be collected. We do not intend to sell nor do we expect that we will be required to sell these securities prior to recovering our amortized cost.

The following table presents the gross unrealized losses and fair values of our fixed maturity securities, aggregated by investment type and length of time that individual fixed maturity securities have been in a continuous unrealized loss position, as of December 31, 2022:


	Less than 12 months					12 months or more					Total
(Amounts in thousands)	Fair value		Gross unrealized losses		Number of securities	Fair value		Gross unrealized losses		Number of securities	Fair value		Gross unrealized losses		Number of securities
Fixed maturity securities:
U.S. government, agencies and GSEs	$	43,873	$	(1,600)	18	$	96	$	(9)	1	$	43,969	$	(1,609)	19
State and political subdivisions	203,752		(40,988)		43	196,235		(56,906)		46	399,987		(97,894)		89
Non-U.S. government	—		—		—	9,349		(1,258)		1	9,349		(1,258)		1
U.S. corporate	2,033,713		(131,150)		468	568,171		(109,611)		92	2,601,884		(240,761)		560
Non-U.S. corporate	486,117		(35,515)		125	155,345		(28,132)		27	641,462		(63,647)		152
Residential mortgage-backed	11,043		(119)		6	—		—		—	11,043		(119)		6
Other asset-backed	655,525		(31,684)		217	375,810		(53,790)		71	1,031,335		(85,474)		288
Total for fixed maturity securities in an unrealized loss position	$	3,434,023	$	(241,056)	877	$	1,305,006	$	(249,706)	238	$	4,739,029	$	(490,762)	1,115

Contractual Maturities of Fixed Maturity Securities Available-For-Sale

The scheduled maturity distribution of fixed maturity securities as of March 31, 2023, is set forth below. Actual maturities may differ from contractual maturities because issuers of securities may have the right to call or prepay obligations with or without call or prepayment penalties.


(Amounts in thousands)	Amortized cost		Fair value
Due one year or less	$	187,395	$	185,488
Due after one year through five years	2,323,642		2,186,748
Due after five years through ten years	1,386,185		1,218,687
Due after ten years	232,482		203,044
Subtotal	4,129,704		3,793,967
Residential mortgage-backed	10,448		10,344
Other asset-backed	1,196,902		1,125,316
Total fixed maturity securities available-for-sale	$	5,337,054	$	4,929,627

As of March 31, 2023, securities issued by the finance and insurance, technology and communications, consumer—non-cyclical, and utilities industry groups represented approximately 33%, 13%, 12%, and 10%, respectively, of our domestic and foreign corporate fixed maturity securities portfolio. No other industry group comprised more than 9% of our investment portfolio.

As of March 31, 2023, we did not hold any fixed maturity securities in any single issuer, other than securities issued or guaranteed by the U.S. government, which exceeded 10% of equity.

As of March 31, 2023 and December 31, 2022, $25.4 million and $25.1 million, respectively, of securities in our portfolio were on deposit with various state insurance commissioners in order to comply with relevant insurance regulations.

Borrowings - Narrative (Details) - USD ($)	Jun. 30, 2022	Mar. 31, 2023	Dec. 31, 2020
Line of Credit \| Revolving Credit Facility
Debt Instrument [Line Items]
Debt instrument, term (in years)	5 years
Line of credit facility, maximum borrowing capacity	$ 200,000,000
Line of credit facility, additional borrowing capacity	$ 100,000,000
6.5% Senior Notes, due 2025 \| Senior Notes
Debt Instrument [Line Items]
Face amount			$ 750,000,000
Stated interest rate		6.50%	6.50%

Changes in accumulated other comprehensive income - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	$ 4,100,908	$ 4,105,523
Other comprehensive income (loss) before reclassifications	62,406	(223,867)
Amounts reclassified from other comprehensive income (loss)	96	(404)
Total other comprehensive income (loss)	62,502	(224,271)
Ending balance	4,296,621	4,048,589
Total
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(382,744)	83,581
Ending balance	(320,242)	(140,690)
Net unrealized investment gains (losses)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(382,896)	83,588
Other comprehensive income (loss) before reclassifications	62,414	(223,896)
Amounts reclassified from other comprehensive income (loss)	96	(404)
Total other comprehensive income (loss)	62,510	(224,300)
Ending balance	(320,386)	(140,712)
Foreign currency translation
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	152	(7)
Other comprehensive income (loss) before reclassifications	(8)	29
Amounts reclassified from other comprehensive income (loss)	0	0
Total other comprehensive income (loss)	(8)	29
Ending balance	$ 144	$ 22

- Definition

+ References

+ Details

Reinsurance - Summary of Effects of Reinsurance on Premiums Written and Earned (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Net premiums written:
Direct	$ 240,939	$ 242,605
Assumed	59	68
Ceded	(19,927)	(18,302)
Net premiums written	221,071	224,371
Net premiums earned:
Direct	254,976	252,513
Assumed	59	68
Ceded	(19,927)	(18,302)
Net premiums earned	$ 235,108	$ 234,279

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Comprehensive Income [Abstract]
Net income	$ 175,988	$ 164,630
Other comprehensive income (loss), net of taxes:
Net unrealized gains (losses) on securities without an allowance for credit losses	62,510	(224,300)
Foreign currency translation	(8)	29
Other comprehensive income (loss)	62,502	(224,271)
Total comprehensive income (loss)	$ 238,490	$ (59,641)

- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

+ References

+ Details

Investments (Tables)

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Summary Investment Income

Sources of net investment income were as follows for the periods indicated:


	Three months ended March 31,
(Amounts in thousands)	2023		2022
Fixed maturity securities available-for-sale	$	41,375	$	36,534
Cash, cash equivalents and short-term investments	5,620		10
Gross investment income before expenses and fees	46,995		36,544
Investment expenses and fees	(1,654)		(1,398)
Net investment income	$	45,341	$	35,146

Summary of Net Investment Gains (Losses)

The following table sets forth net investment gains (losses) for the periods indicated:


	Three months ended March 31,
(Amounts in thousands)	2023		2022
Fixed maturity securities available-for-sale:
Gross realized gains	$	—	$	350
Gross realized (losses)	(122)		(862)
Net realized gains (losses)	(122)		(512)
Net change in allowance for credit losses on fixed maturity securities available-for-sale	—		173

Net investment gains (losses)	$	(122)	$	(339)

Schedule of Unrealized Gain (Loss) on Investments

Net unrealized gains and losses on available-for-sale securities reflected as a separate component of accumulated other comprehensive income (“AOCI”) were as follows as of the dates indicated:


(Amounts in thousands)	March 31, 2023		December 31, 2022
Net unrealized gains (losses) on investment securities:
Fixed maturity securities	$	(407,427)	$	(486,913)
Short-term investments	(29)		(30)
Unrealized gains (losses) on investment securities	(407,456)		(486,943)
Income taxes	87,070		104,047
Net unrealized investment gains (losses)	$	(320,386)	$	(382,896)

The change in net unrealized gains (losses) on available-for-sale securities reported in accumulated other comprehensive income was as follows as of and for the periods indicated:


	Three months ended March 31,
(Amounts in thousands)	2023		2022
Beginning balance	$	(382,896)	$	83,588

Unrealized gains (losses) arising during the period:
Unrealized gains (losses) on investment securities	79,366		(285,401)
Provision for income taxes	(16,952)		60,697
Change in unrealized gains (losses) on investment securities	62,414		(224,704)
Reclassification adjustments to net investment (gains) losses, net of taxes of $(26) and $(108), respectively	96		404
Change in net unrealized investment gains (losses)	62,510		(224,300)
Ending balance	$	(320,386)	$	(140,712)

Summary of Fixed Maturity Securities Classified as Available-for-Sale

As of March 31, 2023, the amortized cost, gross unrealized gains (losses) and fair value of our investment securities were as follows:


(Amounts in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
U.S. government, agencies and GSEs	$	43,772	$	99	$	(1,162)	$	42,709
State and political subdivisions	510,953		2,142		(81,317)		431,778
Non-U.S. government	10,571		—		(1,078)		9,493
U.S. corporate	2,882,422		2,786		(205,723)		2,679,485
Non-U.S. corporate	681,986		552		(52,036)		630,502
Residential mortgage-backed	10,448		2		(106)		10,344
Other asset-backed	1,196,902		1,133		(72,719)		1,125,316
Total fixed maturity securities available-for-sale	$	5,337,054	$	6,714	$	(414,141)	$	4,929,627
Short-term investments	2,214		—		(29)		2,185
Total investments	$	5,339,268	$	6,714	$	(414,170)	$	4,931,812

As of December 31, 2022, the amortized cost, gross unrealized gains (losses) and fair value of our investment securities were as follows:


(Amounts in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
U.S. government, agencies and GSEs	$	46,319	$	59	$	(1,609)	$	44,769
State and political subdivisions	515,935		1,815		(97,894)		419,856
Non-U.S. government	10,607		—		(1,258)		9,349
U.S. corporate	2,886,269		1,355		(240,761)		2,646,863
Non-U.S. corporate	716,333		158		(63,647)		652,844
Residential mortgage-backed	11,162		—		(119)		11,043
Other asset-backed	1,185,048		462		(85,474)		1,100,036
Total fixed maturity securities available-for-sale	$	5,371,673	$	3,849	$	(490,762)	$	4,884,760
Short-term investments	3,077		—		(30)		3,047
Total investments	$	5,374,750	$	3,849	$	(490,792)	$	4,887,807

Schedule of Unrealized Losses and FV of Fixed Maturity Securities Available for Sale


	Less than 12 months					12 months or more					Total
(Amounts in thousands)	Fair value		Gross unrealized losses		Number of securities	Fair value		Gross unrealized losses		Number of securities	Fair value		Gross unrealized losses		Number of securities
Fixed maturity securities:
U.S. government, agencies and GSEs	$	9,024	$	(187)	6	$	32,152	$	(975)	11	$	41,176	$	(1,162)	17
State and political subdivisions	30,891		(1,835)		6	380,669		(79,482)		82	411,560		(81,317)		88
Non-U.S. government	—		—		—	9,493		(1,078)		1	9,493		(1,078)		1
U.S. corporate	1,104,499		(28,535)		292	1,445,412		(177,188)		245	2,549,911		(205,723)		537
Non-U.S. corporate	255,688		(6,862)		77	338,163		(45,174)		63	593,851		(52,036)		140
Residential mortgage-backed	9,377		(106)		5	—		—		—	9,377		(106)		5
Other asset-backed	327,606		(5,760)		115	716,264		(66,959)		155	1,043,870		(72,719)		270
Total for fixed maturity securities in an unrealized loss position	$	1,737,085	$	(43,285)	501	$	2,922,153	$	(370,856)	557	$	4,659,238	$	(414,141)	1,058


	Less than 12 months					12 months or more					Total
(Amounts in thousands)	Fair value		Gross unrealized losses		Number of securities	Fair value		Gross unrealized losses		Number of securities	Fair value		Gross unrealized losses		Number of securities
Fixed maturity securities:
U.S. government, agencies and GSEs	$	43,873	$	(1,600)	18	$	96	$	(9)	1	$	43,969	$	(1,609)	19
State and political subdivisions	203,752		(40,988)		43	196,235		(56,906)		46	399,987		(97,894)		89
Non-U.S. government	—		—		—	9,349		(1,258)		1	9,349		(1,258)		1
U.S. corporate	2,033,713		(131,150)		468	568,171		(109,611)		92	2,601,884		(240,761)		560
Non-U.S. corporate	486,117		(35,515)		125	155,345		(28,132)		27	641,462		(63,647)		152
Residential mortgage-backed	11,043		(119)		6	—		—		—	11,043		(119)		6
Other asset-backed	655,525		(31,684)		217	375,810		(53,790)		71	1,031,335		(85,474)		288
Total for fixed maturity securities in an unrealized loss position	$	3,434,023	$	(241,056)	877	$	1,305,006	$	(249,706)	238	$	4,739,029	$	(490,762)	1,115


(Amounts in thousands)	Amortized cost		Fair value
Due one year or less	$	187,395	$	185,488
Due after one year through five years	2,323,642		2,186,748
Due after five years through ten years	1,386,185		1,218,687
Due after ten years	232,482		203,044
Subtotal	4,129,704		3,793,967
Residential mortgage-backed	10,448		10,344
Other asset-backed	1,196,902		1,125,316
Total fixed maturity securities available-for-sale	$	5,337,054	$	4,929,627

Reinsurance

3 Months Ended

Mar. 31, 2023

SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract]

Reinsurance

We reinsure a portion of our policy risks in order to reduce our ultimate losses, diversify our exposures and comply with regulatory requirements. We also assume certain policy risks written by other companies.

Reinsurance does not relieve us from our obligations to policyholders. In the event that the reinsurers are unable to meet their obligations, we remain liable for the reinsured claims. We monitor both the financial condition of individual reinsurers and risk concentrations arising from similar geographic regions, activities and economic characteristics of reinsurers to lessen the risk of default by such reinsurers.

The following table sets forth the effects of reinsurance on premiums written and earned for the periods indicated:


	Three months ended March 31,
(Amounts in thousands)	2023		2022
Net premiums written:
Direct	$	240,939	$	242,605
Assumed	59		68
Ceded	(19,927)		(18,302)
Net premiums written	$	221,071	$	224,371

Net premiums earned:
Direct	$	254,976	$	252,513
Assumed	59		68
Ceded	(19,927)		(18,302)
Net premiums earned	$	235,108	$	234,279

The difference between written premiums of $221.1 million and earned premiums of $235.1 million represents the decrease in unearned premiums for the three months ended March 31, 2023. The decrease in unearned premiums was primarily the result of policy cancellations in our single premium mortgage insurance product.

Excess-of-loss reinsurance

We engage in excess-of-loss (“XOL”) insurance transactions either through a panel of traditional reinsurance providers or through collateralized reinsurance with unaffiliated special purpose insurers (“Triangle Re Entities”). During the respective coverage periods of these agreements, EMICO retains the

first layer of aggregate loss exposure on covered policies while the reinsurer provides the second layer of coverage, up to the defined reinsurance coverage amount. EMICO retains losses in excess of the respective reinsurance coverage amount.

The Triangle Re Entities fully collateralize their coverage by issuing insurance-linked notes (“ILNs”) to eligible capital market investors in unregistered private offerings. Traditional reinsurance providers collateralize a portion of their coverage by holding funds in trust. We believe that the risk transfer requirements for reinsurance accounting were met as these excess of loss insurance transactions assume significant insurance risk and a reasonable possibility of significant loss.

EMICO has rights to terminate the ILNs or traditional XOL reinsurance agreements upon the occurrence of certain events.


Mortgage insurance-linked notes
(Amounts in millions)	Issue date	Policy dates	Initial first layer retained loss	Current first layer retained loss	Initial reinsurance coverage	Current reinsurance coverage
Triangle Re 2020-1 Ltd.	10/22/2020	1/01/2020 - 8/31/2020	$522	$521	$350	$47
Triangle Re 2021-1 Ltd.	3/02/2021	1/01/2014 - 12/31/2018, 10/01/2019 - 12/31/2019	$212	$212	$495	$126
Triangle Re 2021-2 Ltd.	4/16/2021	9/01/2020 - 12/31/2020	$189	$188	$303	$227
Triangle Re 2021-3 Ltd.	9/02/2021	1/01/2021 - 6/30/2021	$304	$303	$372	$328
Total						$728

Traditional excess-of-loss reinsurance
(Amounts in millions)	Issue date	Policy dates	Initial first layer retained loss	Current first layer retained loss	Initial reinsurance coverage	Current reinsurance coverage
2020 XOL	1/01/2020	1/01/2020 - 12/31/2020	$691	$691	$168	$44
2021 XOL	2/04/2021	1/01/2021 - 12/31/2021	$671	$671	$206	$180
2022-1 XOL	1/27/2022	1/01/2022 - 12/31/2022	$462	$462	$196	$196
2022-2 XOL	1/27/2022	1/01/2022 - 12/31/2022	$385	$385	$25	$25
2022-3 XOL	3/24/2022	7/01/2021 - 12/31/2021	$317	$317	$289	$281
2022-4 XOL	3/24/2022	7/01/2021 - 12/31/2021	$264	$264	$36	$36
2022-5 XOL	9/15/2022	1/01/2022 - 6/30/2022	$256	$256	$201	$193
2023-1 XOL	3/08/2023	1/01/2023 - 12/31/2023	$98	$98	$43	$43
Total						$998

On March 8, 2023, we executed an excess of loss reinsurance transaction with a panel of reinsurers, which provides up to $180 million of reinsurance coverage on a portion of current and expected new insurance written for the 2023 book year, effective January 1, 2023.

Borrowings (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of Long-term Borrowings

The following table sets forth long-term borrowings as of the dates indicated:


(Amounts in thousands)	March 31, 2023		December 31, 2022
6.5% Senior Notes, due 2025	$	750,000	$	750,000
Deferred borrowing charges	(6,540)		(7,170)
Total	$	743,460	$	742,830

- 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

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+ Details

Reinsurance - Narrative (Details) - USD ($) $ in Thousands		3 Months Ended
Reinsurance - Narrative (Details) - USD ($) $ in Thousands	Mar. 08, 2023	Mar. 31, 2023	Mar. 31, 2022
Reinsurance Retention Policy [Line Items]
Written premiums		$ 221,071	$ 224,371
Premiums		$ 235,108	$ 234,279
Reinsurance Policy, Type [Axis]: New Insurance Written
Reinsurance Retention Policy [Line Items]
Excess of loss reinsurance coverage	$ 180,000

Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands	Total	Common stock	Additional paid-in capital	Accumulated other comprehensive income (loss)	Retained earnings
Beginning balance at Dec. 31, 2021	$ 4,105,523	$ 1,628	$ 2,371,861	$ 83,581	$ 1,648,453
Comprehensive income (loss):
Net income	164,630				164,630
Other comprehensive income (loss)	(224,271)			(224,271)
Stock-based compensation expense and exercises and other	2,707		2,707		0
Ending balance at Mar. 31, 2022	4,048,589	1,628	2,374,568	(140,690)	1,813,083
Beginning balance at Dec. 31, 2022	4,100,908	1,628	2,382,068	(382,744)	2,099,956
Comprehensive income (loss):
Net income	175,988				175,988
Other comprehensive income (loss)	62,502			62,502
Repurchase of common stock	(22,200)	(10)	(22,190)
Stock-based compensation expense and exercises and other	2,179	1	2,403		(225)
Dividends	(22,756)				(22,756)
Ending balance at Mar. 31, 2023	$ 4,296,621	$ 1,619	$ 2,362,281	$ (320,242)	$ 2,252,963

- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

Reinsurance - Schedule of Retained Aggregate Loss and Initial and Current Reinsurance Coverage (Details) $ in Millions	Mar. 31, 2023 USD ($)
Reinsurance Policy, Type [Axis]: 2020 XOL
Reinsurance Retention Policy [Line Items]
Initial first layer retained loss	$ 691
Current first layer retained loss	691
Initial reinsurance coverage	168
Current reinsurance coverage	44
Reinsurance Policy, Type [Axis]: 2021 XOL
Reinsurance Retention Policy [Line Items]
Initial first layer retained loss	671
Current first layer retained loss	671
Initial reinsurance coverage	206
Current reinsurance coverage	180
Reinsurance Policy, Type [Axis]: 2022-1 XOL
Reinsurance Retention Policy [Line Items]
Initial first layer retained loss	462
Current first layer retained loss	462
Initial reinsurance coverage	196
Current reinsurance coverage	196
Reinsurance Policy, Type [Axis]: 2022-2 XOL
Reinsurance Retention Policy [Line Items]
Initial first layer retained loss	385
Current first layer retained loss	385
Initial reinsurance coverage	25
Current reinsurance coverage	25
Reinsurance Policy, Type [Axis]: 2022-3 XOL
Reinsurance Retention Policy [Line Items]
Initial first layer retained loss	317
Current first layer retained loss	317
Initial reinsurance coverage	289
Current reinsurance coverage	281
Reinsurance Policy, Type [Axis]: 2022-4 XOL
Reinsurance Retention Policy [Line Items]
Initial first layer retained loss	264
Current first layer retained loss	264
Initial reinsurance coverage	36
Current reinsurance coverage	36
Reinsurance Policy, Type [Axis]: 2022-5 XOL
Reinsurance Retention Policy [Line Items]
Initial first layer retained loss	256
Current first layer retained loss	256
Initial reinsurance coverage	201
Current reinsurance coverage	193
Reinsurance Policy, Type [Axis]: 2023-1 XOL
Reinsurance Retention Policy [Line Items]
Initial first layer retained loss	98
Current first layer retained loss	98
Initial reinsurance coverage	43
Current reinsurance coverage	43
Reinsurance Policy, Type [Axis]: Mortgage Insurance-Linked Notes
Reinsurance Retention Policy [Line Items]
Current reinsurance coverage	728
Reinsurance Policy, Type [Axis]: Traditional Excess-of-Loss Reinsurance
Reinsurance Retention Policy [Line Items]
Current reinsurance coverage	998
Reinsurance Policy, Type [Axis]: Triangle Re 2020-1 Ltd.
Reinsurance Retention Policy [Line Items]
Initial first layer retained loss	522
Current first layer retained loss	521
Initial reinsurance coverage	350
Current reinsurance coverage	47
Reinsurance Policy, Type [Axis]: Triangle Re 2021-1 Ltd.
Reinsurance Retention Policy [Line Items]
Initial first layer retained loss	212
Current first layer retained loss	212
Initial reinsurance coverage	495
Current reinsurance coverage	126
Reinsurance Policy, Type [Axis]: Triangle Re 2021-2 Ltd.
Reinsurance Retention Policy [Line Items]
Initial first layer retained loss	189
Current first layer retained loss	188
Initial reinsurance coverage	303
Current reinsurance coverage	227
Reinsurance Policy, Type [Axis]: Triangle Re 2021-3 Ltd.
Reinsurance Retention Policy [Line Items]
Initial first layer retained loss	304
Current first layer retained loss	303
Initial reinsurance coverage	372
Current reinsurance coverage	$ 328

Nature of business, organization structure and basis of presentation	3 Months Ended
	Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of business, organization structure and basis of presentation	Nature of business, organization structure and basis of presentation The accompanying unaudited condensed consolidated financial statements include, on a consolidated basis, the accounts of Enact Holdings, Inc. (“EHI,” together with its subsidiaries, the “Company,” “we,” “us” or “our”) (formerly known as Genworth Mortgage Holdings, Inc.). EHI is a subsidiary of Genworth Financial, Inc. (“Genworth” or “Parent”) and has been since EHI’s incorporation in Delaware in 2012. In September 2021, we completed a minority initial public offering (“IPO”) for 18.4% of EHI’s common stock. We are engaged in the business of writing and assuming residential mortgage guaranty insurance. The insurance protects lenders and investors against certain losses resulting from nonpayment of loans secured by mortgages, deeds of trust, or other instruments constituting a lien on residential real estate. We offer private mortgage insurance products predominantly insuring prime-based, individually underwritten residential mortgage loans (“primary mortgage insurance”). Our primary mortgage insurance enables borrowers to buy homes with a down payment of less than 20% of the home’s value. Primary mortgage insurance also facilitates the sale of these low down payment mortgage loans in the secondary mortgage market, most of which are sold to government sponsored enterprises. We also selectively enter into insurance transactions with lenders and investors, under which we insure a portfolio of loans at or after origination. We also perform fee-based contract underwriting services for mortgage lenders. The provision of underwriting services by mortgage insurers eliminates the duplicative lender and mortgage insurer underwriting activities and expedites the approval process. We operate our business through our primary insurance subsidiary, Enact Mortgage Insurance Corporation, (“EMICO”), formerly known as Genworth Mortgage Insurance Corporation, with operations in all 50 states and the District of Columbia. We completed name changes to some of our subsidiary legal entities during the first quarter of 2022. EMICO is an approved insurer by the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”). Fannie Mae and Freddie Mac are government-sponsored enterprises and we refer to them collectively as the “GSEs.” We operate our business in a single segment, which is how our chief operating decision maker (who is our Chief Executive Officer) reviews our financial performance and allocates resources. Our segment includes a run-off insurance block with reference properties in Mexico (“run-off business”), which is immaterial to our condensed consolidated financial statements. The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Preparing financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ from those estimates. These unaudited condensed consolidated financial statements include all adjustments (including normal recurring adjustments) considered necessary by management to present a fair statement of the financial position, results of operations and cash flows for the periods presented. The results reported in these unaudited condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. The unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and related notes for the years ended December 31, 2022 and 2021.

Borrowings

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Borrowings

Borrowings In 2020, we issued $750 million aggregate principal amount of 6.5% senior notes due in 2025 (the “2025 Senior Notes”). Interest on the 2025 Senior Notes is payable semi-annually in arrears on February 15 and August 15 of each year. The 2025 Senior Notes mature on August 15, 2025.

The following table sets forth long-term borrowings as of the dates indicated:


(Amounts in thousands)	March 31, 2023		December 31, 2022
6.5% Senior Notes, due 2025	$	750,000	$	750,000
Deferred borrowing charges	(6,540)		(7,170)
Total	$	743,460	$	742,830

Revolving Credit Agreement

On June 30, 2022, we entered into a credit agreement with a syndicate of lenders that provides for a five-year, unsecured revolving credit facility (the “Facility”) in the initial aggregate principal amount of $200 million, including the ability for EHI to increase the commitments under the Facility, on an uncommitted basis, by an additional aggregate principal amount of up to $100 million. Borrowings under the Facility will accrue interest at a floating rate tied to a standard short-term borrowing index, selected at EHI’s option, plus an applicable margin. The applicable margin is based on the ratings established by certain debt rating agencies for EHI’s senior unsecured debt.

We may use borrowings under the Facility for working capital needs and general corporate purposes, including the execution of dividends to our shareholders and capital contributions to our insurance subsidiaries. The Facility contains several covenants, including financial covenants relating to minimum net worth, capital and liquidity levels, maximum debt to capitalization level and PMIERs compliance. We are in compliance with all covenants of the Facility and the Facility remained undrawn as of March 31, 2023.

- 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

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+ Details

Changes in accumulated other comprehensive income

3 Months Ended

Mar. 31, 2023

Equity [Abstract]

Changes in accumulated other comprehensive income

The following tables present a roll forward of accumulated other comprehensive income for the three months indicated:


(Amounts in thousands)	Net unrealized investment gains (losses)		Foreign currency translation		Total
Balance as of January 1, 2023, net of tax	$	(382,896)	$	152	$	(382,744)

Other comprehensive income (loss) before reclassifications	62,414		(8)		62,406
Amounts reclassified from other comprehensive income (loss)	96		—		96
Total other comprehensive income (loss)	62,510		(8)		62,502
Balance as of March 31, 2023, net of tax	$	(320,386)	$	144	$	(320,242)

(Amounts in thousands)	Net unrealized investment gains (losses)		Foreign currency translation		Total
Balance as of January 1, 2022, net of tax	$	83,588	$	(7)	$	83,581

Other comprehensive income (loss) before reclassifications	(223,896)		29		(223,867)
Amounts reclassified from other comprehensive income (loss)	(404)		—		(404)
Total other comprehensive income (loss)	(224,300)		29		(224,271)
Balance as of March 31, 2022, net of tax	$	(140,712)	$	22	$	(140,690)


	Amount reclassified from accumulated other comprehensive income				Affected line item in the condensed consolidated statements of income
	Three months ended March 31,
(Amounts in thousands)	2023		2022
Net unrealized gains (losses) on investments	$	(122)	$	(512)		Net investment gains (losses)
Benefit (expense) from income taxes	26		108			Provision for income taxes

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Amortized cost	$ 5,337,054	$ 5,371,673
Premiums receivable, allowance for credit losses	$ 868	$ 873
Common stock, par value (in usd per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	600,000	600,000
Common stock, issued (in shares)	161,938	162,779
Common stock, outstanding (in shares)	161,938	162,779

Investments - Net Unrealized Gains and Losses on Available-for-Sale Securities as a Separate Component of OCI (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Net Investment Income [Line Items]
Unrealized gains (losses) on investment securities	$ (407,456)	$ (486,943)
Income taxes	87,070	104,047
Net unrealized investment gains (losses)	(320,386)	(382,896)
Fixed maturity securities
Net Investment Income [Line Items]
Unrealized gains (losses) on investment securities	(407,427)	(486,913)
Short-term investments
Net Investment Income [Line Items]
Unrealized gains (losses) on investment securities	$ (29)	$ (30)

Loss reserves - Activity for the Liability for Loss Reserves (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Dec. 31, 2021
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]
Loss reserves, beginning balance	$ 519,008	$ 641,325
Run-off reserves	781	685	$ (678)	$ (681)
Net loss reserves, beginning balance	518,330	640,644
Losses and LAE incurred related to current accident year	60,298	41,274
Losses and LAE incurred related to prior accident years	(71,329)	(51,707)
Total incurred	(11,031)	(10,433)
Losses and LAE paid related to current accident year	(137)	(4)
Losses and LAE paid related to prior accident years	(6,516)	(5,613)
Total paid	(6,653)	(5,617)
Net loss reserves, ending balance	500,646	624,594
Loss reserves, ending balance	$ 501,427	$ 625,279

Related party transactions (Tables)

3 Months Ended

Mar. 31, 2023

Schedule of Related Party Transactions

The condensed consolidated financial statements include the following amounts due to and from Genworth relating to recurring service and expense agreements as of:


(Amounts in thousands)	March 31, 2023		December 31, 2022
Amounts payable to Genworth	$	8,910	$	9,291
Amounts receivable from Genworth	$	153	$	167

Stockholders' equity	3 Months Ended
Stockholders' equity	Mar. 31, 2023
Equity [Abstract]
Stockholders' equity	Stockholders’ equity Share Repurchase Program On November 1, 2022, our Board of Directors approved a share repurchase program authorizing the Company to spend up to $75 million, excluding commissions, to repurchase EHI common stock in the open market or in privately negotiated transactions, based on market and business conditions, stock price and other factors. EHI generally operates its share repurchase programs pursuant to a trading plan under Rule 10b5-1 of the Exchange Act, which permits the Company to purchase shares, at predetermined price targets, when it may otherwise be precluded from doing so. During the three months ended March 31, 2023, the Company purchased 916,776 shares at an average price of $24.19 per share, including commissions. As of March 31, 2023, $51.3 million remained available under this program. All treasury stock has been retired as of March 31, 2023. Subsequent to quarter end, the Company purchased 353,416 shares at an average price of $23.73 through April 30, 2023. Cash Dividends In the first quarter of 2023, we paid a quarterly cash dividend of $0.14 per share. There were no dividends paid during the first quarter of 2022. Subsequent to quarter end, we announced our next quarterly dividend would be $0.16 per share and paid in June 2023.

- 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.

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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
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-Section 50
-Paragraph 18
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
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-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
-SubTopic 40
-Section 50
-Paragraph 6
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008

+ Details

Fair value

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair value

Recurring fair value measurements

We hold fixed maturity securities and short-term investments, which are carried at fair value. The fair value of fixed maturity securities and short-term investments are estimated primarily based on information derived from third-party pricing services (“pricing services”), internal models and/or broker quotes, which use a market approach, income approach or a combination of the market and income approach depending on the type of instrument and availability of information. In general, a market approach is utilized if there is readily available and relevant market activity for an individual security. In certain cases where market information is not available for a specific security but is available for similar securities, that security is valued using market information for similar securities, which is also a market approach. When market information is not available for a specific security (or similar securities) or is available but such information is less relevant or reliable, an income approach or a combination of a market and income approach is utilized. For securities with optionality, such as call or prepayment features (including asset-backed securities), an income or combination approach may be used. These valuation techniques may change from period to period, based on the relevance and availability of market data.

Further, while we consider the valuations provided by pricing services and broker quotes to be of high quality, management determines the fair value of our investment securities after considering all relevant and available information.

In general, we first obtain valuations from pricing services. If prices are unavailable for public securities, we obtain broker quotes. For all securities, excluding certain private fixed maturity securities, if neither a pricing service nor broker quotes valuation is available, we determine fair value using internal models. For certain private fixed maturity securities where we do not obtain valuations from pricing services, we utilize an internal model to determine fair value since transactions for similar securities are not readily observable and these securities are not typically valued by pricing services.

Given our understanding of the pricing methodologies and procedures of pricing services, the securities valued by pricing services are typically classified as Level 2 unless we determine the valuation process for a security or group of securities utilizes significant unobservable inputs, which would result in the valuation being classified as Level 3.

Broker quotes are typically based on an income approach given the lack of available market data. As the valuation typically includes significant unobservable inputs, we classify the securities where fair value is based on our consideration of broker quotes as Level 3 measurements.

For private fixed maturity securities, we utilize an income approach where we obtain public bond spreads and utilize those in an internal model to determine fair value. Other inputs to the model include rating and weighted-average life, as well as sector which is used to assign the spread. We then add an additional premium, which represents an unobservable input, to the public bond spread to adjust for the liquidity and other features of our private placements. We utilize the estimated market yield to discount the expected cash flows of the security to determine fair value. We utilize price caps for securities where the estimated market yield results in a valuation that may exceed the amount that would be received in a market transaction. When a security does not have an external rating, we assign the security an internal rating to determine the appropriate public bond spread that should be utilized in the valuation. While we generally consider the public bond spreads by sector and maturity to be observable inputs, we evaluate the similarities of our private placement with the public bonds, any price caps utilized, liquidity premiums applied, and whether external ratings are available for our private placements to determine whether the spreads utilized would be considered observable inputs. We classify private securities without an external rating or public bond spread as Level 3. In general, a significant increase (decrease) in credit spreads

would have resulted in a significant decrease (increase) in the fair value for our fixed maturity securities as of March 31, 2023.

For remaining securities priced using internal models, we determine fair value using an income approach. We maximize the use of observable inputs but typically utilize significant unobservable inputs to determine fair value. Accordingly, the valuations are typically classified as Level 3.

Our assessment of whether or not there were significant unobservable inputs related to fixed maturity securities was based on our observations obtained through the course of managing our investment portfolio, including interaction with other market participants, observations related to the availability and consistency of pricing and/or rating, and understanding of general market activity such as new issuance and the level of secondary market trading for a class of securities. Additionally, we considered data obtained from pricing services to determine whether our estimated values incorporate significant unobservable inputs that would result in the valuation being classified as Level 3.

A summary of the inputs used for our fixed maturity securities and short-term investments based on the level in which instruments are classified is included below. We have combined certain classes of instruments together as the nature of the inputs is similar.

Level 1 measurements

There were no fixed maturity securities classified as Level 1 as of March 31, 2023, and December 31, 2022.

Level 2 measurements

Fixed maturity securities:

Third-party pricing services

In estimating the fair value of fixed maturity securities, approximately 89% of our portfolio was priced using third-party pricing services as of March 31, 2023. These pricing services utilize industry-standard valuation techniques that include market-based approaches, income-based approaches, a combination of market-based and income-based approaches or other proprietary, internally generated models as part of the valuation processes. These third-party pricing vendors maximize the use of publicly available data inputs to generate valuations for each asset class. Priority and type of inputs used may change frequently as certain inputs may be more direct drivers of valuation at the time of pricing. Examples of significant inputs incorporated by pricing services may include sector and issuer spreads, seasoning, capital structure, security optionality, collateral data, prepayment assumptions, default assumptions, delinquencies, debt covenants, benchmark yields, trade data, dealer quotes, credit ratings, maturity and weighted-average life. We conduct regular meetings with our pricing services for the purpose of understanding the methodologies, techniques and inputs used by the third-party pricing providers.

The following table presents a summary of the significant inputs used by our pricing services for certain fair value measurements of fixed maturity securities that are classified as Level 2 as of March 31, 2023:

(Amounts in thousands)

Fair value

Primary methodologies

Significant inputs

U.S. government, agencies and GSEs

42,709

Price quotes from trading desk, broker feeds

Bid side prices, trade prices, Option Adjusted Spread (“OAS”) to swap curve, Bond Market Association OAS, Treasury Curve, Agency Bullet Curve, maturity to issuer spread

State and political subdivisions

431,778

Multi-dimensional attribute-based modeling systems, third-party pricing vendors

Trade prices, material event notices, Municipal Market Data benchmark yields, broker quotes

Non-U.S. government

9,493

Matrix pricing, spread priced to benchmark curves, price quotes from market makers

Benchmark yields, trade prices, broker quotes, comparative transactions, issuer spreads, bid-offer spread, market research publications, third-party pricing sources

U.S. corporate

2,279,530

Multi-dimensional attribute-based modeling systems, broker quotes, price quotes from market makers, internal models, OAS-based models

Bid side prices to Treasury Curve, Issuer Curve, which includes sector, quality, duration, OAS percentage and change for spread matrix, trade prices, comparative transactions, Trade Reporting and Compliance Engine (“TRACE”) reports

Non-U.S. corporate

483,345

Multi-dimensional attribute-based modeling systems, OAS-based models, price quotes from market makers

Benchmark yields, trade prices, broker quotes, comparative transactions, issuer spreads, bid-offer spread, market research publications, third-party pricing sources

Residential mortgage-backed

10,344

OAS-based models, single factor binomial models, internally priced

Prepayment and default assumptions, aggregation of bonds with similar characteristics, including collateral type, vintage, tranche type, weighted-average life, weighted-average loan age, issuer program and delinquency ratio, pay up and pay down factors, TRACE reports

Other asset-backed

1,124,332

Multi-dimensional attribute-based modeling systems, spread matrix priced to swap curves, price quotes from market makers

Spreads to daily updated swap curves, spreads derived from trade prices and broker quotes, bid side prices, new issue data, collateral performance, analysis of prepayment speeds, cash flows, collateral loss analytics, historical issue analysis, trade data from market makers, TRACE reports

Internal models

A portion of our Level 2 U.S. corporate and non-U.S. corporate securities are valued using internal models. The fair value of these fixed maturity securities was $183.6 million and $73.0 million, respectively, as of March 31, 2023. Internally modeled securities are primarily private fixed maturity securities where we use market observable inputs such as an interest rate yield curve, published credit spreads for similar securities based on the external ratings of the instrument and related industry sector of the issuer. Additionally, we may apply certain price caps and liquidity premiums in the valuation of private fixed maturity securities. Price caps and liquidity premiums are established using inputs from market participants.

Short-term investments:

The fair value of short-term investments classified as Level 2 is determined after considering prices obtained by pricing services.

Level 3 measurements

Broker quotes

A portion of our U.S. corporate and other asset-backed securities are valued using broker quotes. Broker quotes are obtained from third-party providers that have current market knowledge to provide a reasonable price for securities not routinely priced by pricing services. Brokers utilized for valuation of assets are reviewed annually. The fair value of our Level 3 fixed maturity securities priced by broker quotes was $3.2 million as of March 31, 2023.

Internal models

A portion of our U.S. corporate and non-U.S. corporate securities are valued using internal models. The primary inputs to the valuation of the bond population include quoted prices for identical assets, or similar assets in markets that are not active, contractual cash flows, duration, call provisions, issuer rating, benchmark yields and credit spreads. Certain private fixed maturity securities are valued using an internal model using market observable inputs such as the interest rate yield curve, as well as published credit spreads for similar securities, which includes significant unobservable inputs. Additionally, we may apply certain price caps and liquidity premiums in the valuation of private fixed maturity securities. Price caps are established using inputs from market participants. For structured securities, the primary inputs to the valuation include quoted prices for identical assets, or similar assets in markets that are not active, contractual cash flows, weighted-average coupon, weighted-average maturity, issuer rating, structure of the security, expected prepayment speeds and volumes, collateral type, current and forecasted loss severity, average delinquency rates, vintage of the loans, geographic region, debt service coverage ratios, payment priority with the tranche, benchmark yields and credit spreads. The fair value of our Level 3 fixed maturity securities priced using internal models was $288.3 million as of March 31, 2023.

The following tables set forth our assets by class of instrument that are measured at fair value on a recurring basis as of the dates indicated:


	March 31, 2023
(Amounts in thousands)	Total		Level 1		Level 2		Level 3
Fixed maturity securities:
U.S. government, agencies and GSEs	$	42,709	$	—	$	42,709	$	—
State and political subdivisions	431,778		—		431,778		—
Non-U.S. government	9,493		—		9,493		—
U.S. corporate	2,679,485		—		2,463,155		216,330
Non-U.S. corporate	630,502		—		556,371		74,131
Residential mortgage-backed	10,344		—		10,344		—
Other asset-backed	1,125,316		—		1,124,332		984
Total fixed maturity securities	4,929,627		—		4,638,182		291,445
Short-term investments	2,185		—		2,185		—
Total	$	4,931,812	$	—	$	4,640,367	$	291,445


	December 31, 2022
(Amounts in thousands)	Total		Level 1		Level 2		Level 3
Fixed maturity securities:
U.S. government, agencies and GSEs	$	44,769	$	—	$	44,769	$	—
State and political subdivisions	419,856		—		419,856		—
Non-U.S. government	9,349		—		9,349		—
U.S. corporate	2,646,863		—		2,426,237		220,626
Non-U.S. corporate	652,844		—		557,690		95,154
Residential mortgage-backed	11,043		—		11,043		—
Other asset-backed	1,100,036		—		1,096,555		3,481
Total fixed maturity securities	4,884,760		—		4,565,499		319,261
Short-term investments	3,047		—		3,047		—
Total	$	4,887,807	$	—	$	4,568,546	$	319,261

We had no liabilities recorded at fair value as of March 31, 2023, and December 31, 2022.

The following tables present additional information about assets measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value as of or for the dates indicated:


	Beginning balance as of January 1, 2023		Total realized and unrealized gains (losses)				Purchases		Sales		Settlements		Transfer into Level 3 (1)		Transfer out of Level 3 (1)		Ending balance as of March 31, 2023			Total gains (losses) attributable to assets still held
(Amounts in thousands)			Included in net income		Included in OCI														Included in net income			Included in OCI
Fixed maturity securities:
U.S. corporate	$	220,626	$	(13)	$	4,024	$	3,000	$	(6,899)	$	(4,408)	$	—	$	—	$	216,330		$	(9)		$	3,749
Non-U.S. corporate	95,154		(725)		2,767		3,759		(3,543)		(23,281)		—		—		74,131			8			1,432
Other asset-backed	3,481		3		14		—		—		—		—		(2,514)		984			3			(4)
Total	$	319,261	$	(735)	$	6,805	$	6,759	$	(10,442)	$	(27,689)	$	—	$	(2,514)	$	291,445		$	2		$	5,177

	Beginning balance as of January 1, 2022		Total realized and unrealized gains (losses)				Purchases		Sales		Settlements		Transfer into Level 3 (1)		Transfer out of Level 3 (1)		Ending balance as of March 31, 2022			Total gains (losses) attributable to assets still held
(Amounts in thousands)			Included in net income		Included in OCI														Included in net income			Included in OCI
Fixed maturity securities:
U.S. corporate	$	220,733	$	(15)	$	(16,784)	$	39,969	$	—	$	(440)	$	—	$	—	$	243,463		$	(15)		$	(16,784)
Non-U.S. corporate	83,664		(84)		(5,337)		10,000		—		(106)		—		(3,719)		84,418			(84)			(5,044)
Other asset-backed	24,223		—		(1,624)		—		—		—		—		(22,599)		—			—			—
Total	$	328,620	$	(99)	$	(23,745)	$	49,969	$	—	$	(546)	$	—	$	(26,318)	$	327,881		$	(99)		$	(21,828)

______________

(1)The transfers into and out of Level 3 for fixed maturity securities were related to changes in the primary pricing source and changes in the observability of external information used in determining the fair value, such as external ratings or credit spreads.

Purchases, sales, issuances and settlements represent the activity that occurred during the period that results in a change of the asset but does not represent changes in fair value for the instruments held at the beginning of the period.

The amount presented for realized and unrealized gains (losses) included in net income for fixed maturity securities primarily represents amortization and accretion of premiums and discounts on certain fixed maturity securities recorded within net investment income.

The following table presents a summary of the significant unobservable inputs used for certain asset fair value measurements that are based on internal models and classified as Level 3 as of March 31, 2023:

(Amounts in thousands)

Valuation

technique

Fair value (1)

Unobservable

input

Range (bps)

Weighted-

average (2) (bps)

Fixed maturity securities:

U.S. corporate

Internal models

214,141

Credit spreads

71 - 357

159

Non-U.S. corporate

Internal models

74,131

Credit spreads

100 - 215

152

______________

(1)Certain classes of instruments classified as Level 3 are excluded as a result of not being material or due to limitations in being able to obtain the underlying inputs used by certain third-party sources, such as broker quotes, used as an input in determining fair value.

(2)Unobservable inputs weighted by the relative fair value of the associated instrument.

We have certain financial instruments that are not recorded at fair value, including cash and cash equivalents and accrued investment income, the carrying value of which approximate fair value due to the short-term nature of these instruments and are not included in this disclosure.

Liabilities not required to be carried at fair value

The following represents our estimated fair value of financial liabilities that are not required to be carried at fair value, classified as Level 2, as of the dates indicated:


	March 31, 2023				December 31, 2022
(Amounts in thousands)	Carrying amount		Fair value		Carrying amount		Fair value
Long-term borrowings	$	743,460	$	733,298	$	742,830	$	739,020

- 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

Stockholders' equity (Details) - USD ($)	1 Months Ended		3 Months Ended
Stockholders' equity (Details) - USD ($)	May 05, 2023	Apr. 30, 2023	Mar. 31, 2023	Nov. 01, 2022
Equity, Class of Treasury Stock [Line Items]
Stock repurchase program, authorized amount				$ 75,000,000
Stock repurchased and retired during period (in shares)			916,776
Stock acquired, average cost per share (in usd per share)			$ 24.19
Stock repurchase program, remaining authorized repurchase amount			$ 51,300,000
Cash dividends paid (in usd per share)			$ 0.14
Subsequent Event
Equity, Class of Treasury Stock [Line Items]
Stock repurchased and retired during period (in shares)		353,416
Stock acquired, average cost per share (in usd per share)		$ 23.73
Cash dividends declared (in usd per share)	$ 0.16

Fair value (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Summary of Significant Inputs used for Fair Value Measurement of Fixed Maturity Securities

(Amounts in thousands)

Fair value

Primary methodologies

Significant inputs

U.S. government, agencies and GSEs

42,709

Price quotes from trading desk, broker feeds

Bid side prices, trade prices, Option Adjusted Spread (“OAS”) to swap curve, Bond Market Association OAS, Treasury Curve, Agency Bullet Curve, maturity to issuer spread

State and political subdivisions

431,778

Multi-dimensional attribute-based modeling systems, third-party pricing vendors

Trade prices, material event notices, Municipal Market Data benchmark yields, broker quotes

Non-U.S. government

9,493

Matrix pricing, spread priced to benchmark curves, price quotes from market makers

Benchmark yields, trade prices, broker quotes, comparative transactions, issuer spreads, bid-offer spread, market research publications, third-party pricing sources

U.S. corporate

2,279,530

Multi-dimensional attribute-based modeling systems, broker quotes, price quotes from market makers, internal models, OAS-based models

Non-U.S. corporate

483,345

Multi-dimensional attribute-based modeling systems, OAS-based models, price quotes from market makers

Benchmark yields, trade prices, broker quotes, comparative transactions, issuer spreads, bid-offer spread, market research publications, third-party pricing sources

Residential mortgage-backed

10,344

OAS-based models, single factor binomial models, internally priced

Other asset-backed

1,124,332

Multi-dimensional attribute-based modeling systems, spread matrix priced to swap curves, price quotes from market makers

Schedule of Fair Value Assets Measured on Recurring Basis

The following tables set forth our assets by class of instrument that are measured at fair value on a recurring basis as of the dates indicated:


	March 31, 2023
(Amounts in thousands)	Total		Level 1		Level 2		Level 3
Fixed maturity securities:
U.S. government, agencies and GSEs	$	42,709	$	—	$	42,709	$	—
State and political subdivisions	431,778		—		431,778		—
Non-U.S. government	9,493		—		9,493		—
U.S. corporate	2,679,485		—		2,463,155		216,330
Non-U.S. corporate	630,502		—		556,371		74,131
Residential mortgage-backed	10,344		—		10,344		—
Other asset-backed	1,125,316		—		1,124,332		984
Total fixed maturity securities	4,929,627		—		4,638,182		291,445
Short-term investments	2,185		—		2,185		—
Total	$	4,931,812	$	—	$	4,640,367	$	291,445


	December 31, 2022
(Amounts in thousands)	Total		Level 1		Level 2		Level 3
Fixed maturity securities:
U.S. government, agencies and GSEs	$	44,769	$	—	$	44,769	$	—
State and political subdivisions	419,856		—		419,856		—
Non-U.S. government	9,349		—		9,349		—
U.S. corporate	2,646,863		—		2,426,237		220,626
Non-U.S. corporate	652,844		—		557,690		95,154
Residential mortgage-backed	11,043		—		11,043		—
Other asset-backed	1,100,036		—		1,096,555		3,481
Total fixed maturity securities	4,884,760		—		4,565,499		319,261
Short-term investments	3,047		—		3,047		—
Total	$	4,887,807	$	—	$	4,568,546	$	319,261

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


	Beginning balance as of January 1, 2023		Total realized and unrealized gains (losses)				Purchases		Sales		Settlements		Transfer into Level 3 (1)		Transfer out of Level 3 (1)		Ending balance as of March 31, 2023			Total gains (losses) attributable to assets still held
(Amounts in thousands)			Included in net income		Included in OCI														Included in net income			Included in OCI
Fixed maturity securities:
U.S. corporate	$	220,626	$	(13)	$	4,024	$	3,000	$	(6,899)	$	(4,408)	$	—	$	—	$	216,330		$	(9)		$	3,749
Non-U.S. corporate	95,154		(725)		2,767		3,759		(3,543)		(23,281)		—		—		74,131			8			1,432
Other asset-backed	3,481		3		14		—		—		—		—		(2,514)		984			3			(4)
Total	$	319,261	$	(735)	$	6,805	$	6,759	$	(10,442)	$	(27,689)	$	—	$	(2,514)	$	291,445		$	2		$	5,177

	Beginning balance as of January 1, 2022		Total realized and unrealized gains (losses)				Purchases		Sales		Settlements		Transfer into Level 3 (1)		Transfer out of Level 3 (1)		Ending balance as of March 31, 2022			Total gains (losses) attributable to assets still held
(Amounts in thousands)			Included in net income		Included in OCI														Included in net income			Included in OCI
Fixed maturity securities:
U.S. corporate	$	220,733	$	(15)	$	(16,784)	$	39,969	$	—	$	(440)	$	—	$	—	$	243,463		$	(15)		$	(16,784)
Non-U.S. corporate	83,664		(84)		(5,337)		10,000		—		(106)		—		(3,719)		84,418			(84)			(5,044)
Other asset-backed	24,223		—		(1,624)		—		—		—		—		(22,599)		—			—			—
Total	$	328,620	$	(99)	$	(23,745)	$	49,969	$	—	$	(546)	$	—	$	(26,318)	$	327,881		$	(99)		$	(21,828)

______________

(Amounts in thousands)

Valuation

technique

Fair value (1)

Unobservable

input

Range (bps)

Weighted-

average (2) (bps)

Fixed maturity securities:

U.S. corporate

Internal models

214,141

Credit spreads

71 - 357

159

Non-U.S. corporate

Internal models

74,131

Credit spreads

100 - 215

152

______________

(2)Unobservable inputs weighted by the relative fair value of the associated instrument.

Schedule of Estimated Fair Value Liabilities

The following represents our estimated fair value of financial liabilities that are not required to be carried at fair value, classified as Level 2, as of the dates indicated:


	March 31, 2023				December 31, 2022
(Amounts in thousands)	Carrying amount		Fair value		Carrying amount		Fair value
Long-term borrowings	$	743,460	$	733,298	$	742,830	$	739,020

Investments - Net Investment Gains (Losses) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Fixed maturity securities available-for-sale:
Gross realized gains	$ 0	$ 350
Gross realized (losses)	(122)	(862)
Net realized gains (losses)	(122)	(512)
Net change in allowance for credit losses on fixed maturity securities available-for-sale	0	173
Net investment gains (losses)	$ (122)	$ (339)

Investments - Summary of Fixed Maturity Securities Classified as Available-for-Sale (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]
Amortized cost	$ 5,337,054	$ 5,371,673
Gross unrealized gains	6,714	3,849
Gross unrealized losses	(414,141)	(490,762)
Fair value	4,929,627	4,884,760
Total investments
Debt Securities, Available-for-sale [Line Items]
Amortized cost	5,339,268	5,374,750
Gross unrealized gains	6,714	3,849
Gross unrealized losses	(414,170)	(490,792)
Fair value	4,931,812	4,887,807
U.S. government, agencies and GSEs
Debt Securities, Available-for-sale [Line Items]
Amortized cost	43,772	46,319
Gross unrealized gains	99	59
Gross unrealized losses	(1,162)	(1,609)
Fair value	42,709	44,769
State and political subdivisions
Debt Securities, Available-for-sale [Line Items]
Amortized cost	510,953	515,935
Gross unrealized gains	2,142	1,815
Gross unrealized losses	(81,317)	(97,894)
Fair value	431,778	419,856
Non-U.S. government
Debt Securities, Available-for-sale [Line Items]
Amortized cost	10,571	10,607
Gross unrealized gains	0	0
Gross unrealized losses	(1,078)	(1,258)
Fair value	9,493	9,349
U.S. corporate
Debt Securities, Available-for-sale [Line Items]
Amortized cost	2,882,422	2,886,269
Gross unrealized gains	2,786	1,355
Gross unrealized losses	(205,723)	(240,761)
Fair value	2,679,485	2,646,863
Non-U.S. corporate
Debt Securities, Available-for-sale [Line Items]
Amortized cost	681,986	716,333
Gross unrealized gains	552	158
Gross unrealized losses	(52,036)	(63,647)
Fair value	630,502	652,844
Residential mortgage-backed
Debt Securities, Available-for-sale [Line Items]
Amortized cost	10,448	11,162
Gross unrealized gains	2	0
Gross unrealized losses	(106)	(119)
Fair value	10,344	11,043
Other asset-backed
Debt Securities, Available-for-sale [Line Items]
Amortized cost	1,196,902	1,185,048
Gross unrealized gains	1,133	462
Gross unrealized losses	(72,719)	(85,474)
Fair value	1,125,316	1,100,036
Short-term investments
Debt Securities, Available-for-sale [Line Items]
Amortized cost	2,214	3,077
Gross unrealized gains	0	0
Gross unrealized losses	(29)	(30)
Fair value	$ 2,185	$ 3,047

Borrowings - Schedule of Long-term Borrowings (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Dec. 31, 2020
Debt Instrument [Line Items]
Total	$ 743,460	$ 742,830
6.5% Senior Notes, due 2025 \| Senior Notes
Debt Instrument [Line Items]
6.5% Senior Notes, due 2025	750,000	750,000
Deferred borrowing charges	(6,540)	(7,170)
Total	$ 743,460	$ 742,830
Stated interest rate	6.50%		6.50%

- Definition

Amount, excluding unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Investments - Narrative (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]
Total fixed maturity securities	$ 4,929,627	$ 4,884,760
Deposits
Debt Securities, Available-for-sale [Line Items]
Total fixed maturity securities	$ 25,400	$ 25,100
Financial Services Sector
Debt Securities, Available-for-sale [Line Items]
Fixed maturity securities portfolio, percentage	33.00%
Technology And Communications Sector
Debt Securities, Available-for-sale [Line Items]
Fixed maturity securities portfolio, percentage	13.00%
Non-Cyclical Consumer Sector
Debt Securities, Available-for-sale [Line Items]
Fixed maturity securities portfolio, percentage	12.00%
Utilities Industry Group
Debt Securities, Available-for-sale [Line Items]
Fixed maturity securities portfolio, percentage	10.00%

Loss reserves

3 Months Ended

Mar. 31, 2023

Insurance [Abstract]

Loss reserves

Activity for the liability for loss reserves for the three months ended March 31, is summarized as follows:


(Amounts in thousands)	2023		2022
Loss reserves, beginning balance	$	519,008	$	641,325
Run-off reserves	(678)		(681)
Net loss reserves, beginning balance	518,330		640,644

Losses and LAE incurred related to current accident year	60,298		41,274
Losses and LAE incurred related to prior accident years	(71,329)		(51,707)
Total incurred (1)	(11,031)		(10,433)

Losses and LAE paid related to current accident year	(137)		(4)
Losses and LAE paid related to prior accident years	(6,516)		(5,613)
Total paid (1)	(6,653)		(5,617)

Net loss reserves, ending balance	500,646		624,594
Run-off reserves	781		685
Loss reserves, ending balance	$	501,427	$	625,279

______________

(1)Losses and loss adjustment expenses (“LAE”) incurred and paid exclude losses related to our run-off business.

The liability for loss reserves represents our current best estimate; however, there may be future adjustments to this estimate and related assumptions. Such adjustments, reflecting any variety of new and adverse trends, could possibly be significant, and result in future increases to reserves by amounts that could be material to our results of operations, financial condition and liquidity.

Losses incurred related to insured events of the current accident year relate to defaults that occurred in that year and represent the estimated ultimate amount of losses to be paid on such defaults. Losses incurred related to insured events of prior accident years represent the (favorable) or unfavorable development of reserves as a result of the actual rates at which delinquencies go to claim (“claim rates”) and claim amounts being different than those we estimated when originally establishing the reserves. Such estimates are based on our historical experience, which we believe is representative of expected future losses at the time of estimation. As a result of the extended period of time that may exist between the reporting of a delinquency and the claim payment, as well as changes in economic conditions and the real estate market, significant uncertainty and variability exist on amounts ultimately paid.

A portion of delinquencies in the periods presented were from borrowers participating in deferred or reduced payments (“forbearance”) as a result of COVID-19. When establishing loss reserves for borrowers in forbearance from 2020 to 2022, we assumed a lower rate of delinquencies becoming active claims, which had the effect of producing a lower reserve compared to delinquencies that were not in forbearance. Historical experience with localized natural disasters, such as hurricanes, indicates a higher cure rate for borrowers in forbearance. Loss reserves recorded on these new delinquencies have a high

degree of estimation due to the level of uncertainty regarding whether delinquencies in forbearance will ultimately cure or result in claim payments as well as the timing and severity of those payments.

For the three months ended March 31, 2023, losses and LAE incurred of $60 million related to insured events of the current accident year was primarily attributable to new delinquencies.

We also recorded favorable adjustments on prior accident year reserves of $70 million, which were primarily driven by cure performance of delinquencies from 2020 and 2021 related to COVID-19. During the peak of COVID-19, we experienced elevated new delinquencies subject to forbearance plans. Those delinquencies have continued to perform at levels above our reserve expectations. During the first three months of 2022, we released $50 million of reserves primarily related to COVID-19 delinquencies from 2020.

Accounting changes	3 Months Ended
Accounting changes	Mar. 31, 2023
Accounting Policies [Abstract]
Accounting changes	Accounting changes Accounting Pronouncements Recently Adopted We have not adopted new accounting pronouncements in 2023. Accounting Pronouncements Not Yet Adopted There are no significant new accounting pronouncements impacting our financial statements.

Net income per common share (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Net Income Per Share

The calculation of basic and diluted net income per share is as follows:


	Three months ended March 31,
(Amounts in thousands, except per share amounts)	2023		2022
Net income available to EHI common stockholders	$	175,988	$	164,630
Net income per common share:
Basic	$	1.08	$	1.01
Diluted	$	1.08	$	1.01
Weighted average common shares outstanding:
Basic	162,442		162,841
Diluted	163,179		163,054

Loss reserves - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Liability for Claims and Claims Adjustment Expense [Line Items]
Losses and LAE incurred	$ 60,298	$ 41,274
Adjustments on prior accident year reserves	(71,329)	(51,707)
Scenario One
Liability for Claims and Claims Adjustment Expense [Line Items]
Losses and LAE incurred	60,000
Adjustments on prior accident year reserves	$ 70,000
Scenario Two
Liability for Claims and Claims Adjustment Expense [Line Items]
Adjustments on prior accident year reserves		$ 50,000

Accounting changes (Policies)	3 Months Ended
Accounting changes (Policies)	Mar. 31, 2023
Accounting Policies [Abstract]
Accounting Pronouncements Recently Adopted and Accounting Pronouncements Not Yet Adopted	Accounting Pronouncements Recently Adopted We have not adopted new accounting pronouncements in 2023. Accounting Pronouncements Not Yet Adopted There are no significant new accounting pronouncements impacting our financial statements.
Recurring fair value measurements	We hold fixed maturity securities and short-term investments, which are carried at fair value. The fair value of fixed maturity securities and short-term investments are estimated primarily based on information derived from third-party pricing services (“pricing services”), internal models and/or broker quotes, which use a market approach, income approach or a combination of the market and income approach depending on the type of instrument and availability of information. In general, a market approach is utilized if there is readily available and relevant market activity for an individual security. In certain cases where market information is not available for a specific security but is available for similar securities, that security is valued using market information for similar securities, which is also a market approach. When market information is not available for a specific security (or similar securities) or is available but such information is less relevant or reliable, an income approach or a combination of a market and income approach is utilized. For securities with optionality, such as call or prepayment features (including asset-backed securities), an income or combination approach may be used. These valuation techniques may change from period to period, based on the relevance and availability of market data. Further, while we consider the valuations provided by pricing services and broker quotes to be of high quality, management determines the fair value of our investment securities after considering all relevant and available information. In general, we first obtain valuations from pricing services. If prices are unavailable for public securities, we obtain broker quotes. For all securities, excluding certain private fixed maturity securities, if neither a pricing service nor broker quotes valuation is available, we determine fair value using internal models. For certain private fixed maturity securities where we do not obtain valuations from pricing services, we utilize an internal model to determine fair value since transactions for similar securities are not readily observable and these securities are not typically valued by pricing services. Given our understanding of the pricing methodologies and procedures of pricing services, the securities valued by pricing services are typically classified as Level 2 unless we determine the valuation process for a security or group of securities utilizes significant unobservable inputs, which would result in the valuation being classified as Level 3. Broker quotes are typically based on an income approach given the lack of available market data. As the valuation typically includes significant unobservable inputs, we classify the securities where fair value is based on our consideration of broker quotes as Level 3 measurements. For private fixed maturity securities, we utilize an income approach where we obtain public bond spreads and utilize those in an internal model to determine fair value. Other inputs to the model include rating and weighted-average life, as well as sector which is used to assign the spread. We then add an additional premium, which represents an unobservable input, to the public bond spread to adjust for the liquidity and other features of our private placements. We utilize the estimated market yield to discount the expected cash flows of the security to determine fair value. We utilize price caps for securities where the estimated market yield results in a valuation that may exceed the amount that would be received in a market transaction. When a security does not have an external rating, we assign the security an internal rating to determine the appropriate public bond spread that should be utilized in the valuation. While we generally consider the public bond spreads by sector and maturity to be observable inputs, we evaluate the similarities of our private placement with the public bonds, any price caps utilized, liquidity premiums applied, and whether external ratings are available for our private placements to determine whether the spreads utilized would be considered observable inputs. We classify private securities without an external rating or public bond spread as Level 3. In general, a significant increase (decrease) in credit spreads would have resulted in a significant decrease (increase) in the fair value for our fixed maturity securities as of March 31, 2023. For remaining securities priced using internal models, we determine fair value using an income approach. We maximize the use of observable inputs but typically utilize significant unobservable inputs to determine fair value. Accordingly, the valuations are typically classified as Level 3. Our assessment of whether or not there were significant unobservable inputs related to fixed maturity securities was based on our observations obtained through the course of managing our investment portfolio, including interaction with other market participants, observations related to the availability and consistency of pricing and/or rating, and understanding of general market activity such as new issuance and the level of secondary market trading for a class of securities. Additionally, we considered data obtained from pricing services to determine whether our estimated values incorporate significant unobservable inputs that would result in the valuation being classified as Level 3.

Related party transactions - Schedule of Related Party Transactions (Details) - Genworth Holdings, Inc. - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Related Party Transaction [Line Items]
Amounts payable to Genworth	$ 8,910	$ 9,291
Amounts receivable from Genworth	$ 153	$ 167

Fair value - Summary of Significant Inputs used for Fair Value Measurement of Fixed Maturity Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	$ 4,929,627	$ 4,884,760
State and political subdivisions
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	431,778	419,856
Non-U.S. government
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	9,493	9,349
U.S. corporate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	2,679,485	2,646,863
Non-U.S. corporate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	630,502	652,844
Residential mortgage-backed
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	10,344	11,043
Other asset-backed
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	1,125,316	1,100,036
Fair value, recurring
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	4,929,627	4,884,760
Fair value, recurring \| U.S. government, agencies and GSEs
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	42,709	44,769
Fair value, recurring \| State and political subdivisions
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	431,778	419,856
Fair value, recurring \| Non-U.S. government
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	9,493	9,349
Fair value, recurring \| U.S. corporate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	2,679,485	2,646,863
Fair value, recurring \| Non-U.S. corporate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	630,502	652,844
Fair value, recurring \| Residential mortgage-backed
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	10,344	11,043
Fair value, recurring \| Other asset-backed
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	1,125,316	1,100,036
Level 2 \| Fair value, recurring
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	4,638,182	4,565,499
Level 2 \| Fair value, recurring \| U.S. government, agencies and GSEs
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	42,709	44,769
Level 2 \| Fair value, recurring \| State and political subdivisions
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	431,778	419,856
Level 2 \| Fair value, recurring \| Non-U.S. government
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	9,493	9,349
Level 2 \| Fair value, recurring \| U.S. corporate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	2,463,155	2,426,237
Level 2 \| Fair value, recurring \| Non-U.S. corporate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	556,371	557,690
Level 2 \| Fair value, recurring \| Residential mortgage-backed
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	10,344	11,043
Level 2 \| Fair value, recurring \| Other asset-backed
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	1,124,332	$ 1,096,555
Pricing Services \| Level 2 \| Fair value, recurring \| U.S. government, agencies and GSEs
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	42,709
Pricing Services \| Level 2 \| Fair value, recurring \| State and political subdivisions
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	431,778
Pricing Services \| Level 2 \| Fair value, recurring \| Non-U.S. government
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	9,493
Pricing Services \| Level 2 \| Fair value, recurring \| U.S. corporate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	2,279,530
Pricing Services \| Level 2 \| Fair value, recurring \| Non-U.S. corporate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	483,345
Pricing Services \| Level 2 \| Fair value, recurring \| Residential mortgage-backed
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	10,344
Pricing Services \| Level 2 \| Fair value, recurring \| Other asset-backed
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	$ 1,124,332