Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2021 | May 07, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-39392 | |
Entity Registrant Name | TREAN INSURANCE GROUP, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-4512647 | |
Entity Address, Address Line One | 150 Lake Street West | |
Entity Address, City or Town | Wayzata | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55391 | |
City Area Code | 952 | |
Local Phone Number | 974-2200 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | TIG | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 51,148,782 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001801754 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Investments [Abstract] | ||
Fixed maturities, at fair value (amortized cost of $369,671 and $388,409, respectively) | $ 378,131 | $ 405,604 |
Equity securities, FV-NI | 2,978 | 3,774 |
Equity method investments | 0 | 232 |
Total investments | 381,109 | 409,610 |
Cash and cash equivalents | 130,940 | 153,149 |
Restricted cash | 5,996 | 4,085 |
Accrued investment income | 2,253 | 2,458 |
Premiums and other receivables | 121,740 | 109,217 |
Income taxes receivable | 0 | 1,322 |
Reinsurance recoverable | 360,911 | 343,213 |
Prepaid reinsurance premiums | 110,298 | 107,971 |
Deferred policy acquisition cost, net | 5,029 | 1,332 |
Property and equipment, net | 8,050 | 8,254 |
Right of use asset | 5,844 | 6,338 |
Goodwill | 140,640 | 140,640 |
Intangible assets | 73,903 | 75,316 |
Other assets | 9,334 | 6,878 |
Total assets | 1,356,047 | 1,369,783 |
Liabilities | ||
Unpaid loss and loss adjustment expenses | 485,532 | 457,817 |
Unearned premiums | 176,460 | 157,987 |
Funds held under reinsurance agreements | 151,268 | 174,704 |
Reinsurance premiums payable | 56,975 | 57,069 |
Accounts payable and accrued expenses | 23,148 | 61,240 |
Lease liability | 6,372 | 6,893 |
Income taxes payable | 1,224 | 0 |
Deferred tax liability | 10,620 | 12,329 |
Debt | 31,473 | 31,637 |
Total liabilities | 943,072 | 959,676 |
Commitments and contingencies | ||
Stockholders' equity | ||
Common stock, $0.01 par value per share (600,000,000 authorized; 51,148,782 issued and outstanding) | 511 | 511 |
Additional paid-in capital | 287,321 | 287,110 |
Retained earnings | 119,750 | 112,959 |
Accumulated other comprehensive income | 5,393 | 9,527 |
Total stockholders' equity | 412,975 | 410,107 |
Total liabilities and stockholders' equity | 1,356,047 | 1,369,783 |
Preferred stock | ||
Investments [Abstract] | ||
Equity securities, FV-NI | 237 | 240 |
Common stock | ||
Investments [Abstract] | ||
Equity securities, FV-NI | $ 2,741 | $ 3,534 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Amortized cost | $ 369,671 | $ 388,409 |
Equity securities, cost | $ 984 | $ 1,797 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock, issued (in shares) | 51,148,782 | 51,148,782 |
Common stock, outstanding (in shares) | 51,148,782 | 51,148,782 |
Preferred stock | ||
Equity securities, cost | $ 243 | $ 243 |
Common stock | ||
Equity securities, cost | $ 741 | $ 1,554 |
Condensed Consolidated and Cond
Condensed Consolidated and Condensed Combined Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues | ||
Gross written premiums | $ 146,730 | $ 107,859 |
Increase in gross unearned premiums | (18,431) | (7,373) |
Gross earned premiums | 128,299 | 100,486 |
Ceded earned premiums | (87,165) | (78,027) |
Net earned premiums | 41,134 | 22,459 |
Net investment income | 1,592 | 3,272 |
Net realized capital gains | 13 | 3,234 |
Other revenue | 4,655 | 4,392 |
Total revenue | 47,394 | 33,357 |
Expenses | ||
Losses and loss adjustment expenses | 24,881 | 12,934 |
General and administrative expenses | 11,891 | 8,149 |
Intangible asset amortization | 1,414 | 11 |
Noncash stock compensation | 211 | 0 |
Interest expense | 427 | 461 |
Total expenses | 38,824 | 21,555 |
Other income | 121 | 14 |
Income before taxes | 8,691 | 11,816 |
Income tax expense | 1,900 | 2,912 |
Equity earnings in affiliates, net of tax | 0 | 702 |
Net income | $ 6,791 | $ 9,606 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.13 | $ 0.26 |
Diluted (in dollars per share) | $ 0.13 | $ 0.26 |
Weighted average shares outstanding: | ||
Weighted average number of shares outstanding - basic (in shares) | 51,148,782 | 37,386,394 |
Weighted average number of shares outstanding - diluted (in shares) | 51,179,820 | 37,386,394 |
Condensed Consolidated and Co_2
Condensed Consolidated and Condensed Combined Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 6,791 | $ 9,606 |
Unrealized investment losses: | ||
Unrealized investment losses arising during the period | (5,220) | (1,223) |
Income tax benefit | (1,096) | (256) |
Unrealized investment losses, net of tax | (4,124) | (967) |
Less reclassification adjustments to: | ||
Net realized investment gains included in net realized capital gains | 13 | 119 |
Income tax expense | 3 | 26 |
Total reclassifications included in net income, net of tax | 10 | 93 |
Other comprehensive loss | (4,134) | (1,060) |
Total comprehensive income | $ 2,657 | $ 8,546 |
Condensed Consolidated and Co_3
Condensed Consolidated and Condensed Combined Statements of Stockholders’ Equity and Redeemable Preferred Stock - USD ($) $ in Thousands | Total | Common stock | Common stockClass A - Non Voting | Common stockClass B - Voting | Common stockClass B - Non Voting | Common stockClass C - Non Voting | Additional Paid in Capital | Accumulated Other Comprehensive Income | Retained Earnings |
Redeemable preferred stock beginning balance (in shares) at Dec. 31, 2019 | 51 | ||||||||
Redeemable preferred stock beginning balance at Dec. 31, 2019 | $ 5,100 | ||||||||
Redeemable preferred stock ending balance (in shares) at Mar. 31, 2020 | 51 | ||||||||
Redeemable preferred stock ending balance at Mar. 31, 2020 | $ 5,100 | ||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 65,036,780 | 5,045,215 | 8,159,775 | 196,588 | ||||
Members' equity beginning balance at Dec. 31, 2019 | 141,615 | $ 0 | $ 65,037 | $ 5,045 | $ 8,160 | $ 196 | $ 17,995 | $ 4,821 | $ 40,361 |
Shareholders' equity beginning balance at Dec. 31, 2019 | 4,821 | ||||||||
Redeemable Preferred Stock | |||||||||
Issuance of Class C units (in shares) | 19,659 | ||||||||
Issuance of Class C units | 20 | $ 20 | |||||||
Stock compensation expense | 0 | ||||||||
Other comprehensive loss | (1,060) | (1,060) | |||||||
Net income | 9,606 | 9,606 | |||||||
Ending balance (in shares) at Mar. 31, 2020 | 0 | 65,036,780 | 5,045,215 | 8,159,775 | 216,247 | ||||
Members' equity ending balance at Mar. 31, 2020 | $ 150,181 | $ 0 | $ 65,037 | $ 5,045 | $ 8,160 | $ 216 | 17,995 | 3,761 | 49,967 |
Shareholders' equity ending balance at Mar. 31, 2020 | 3,761 | ||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 51,148,782 | 51,148,782 | |||||||
Shareholders' equity beginning balance at Dec. 31, 2020 | $ 410,107 | $ 511 | 287,110 | 9,527 | 112,959 | ||||
Redeemable Preferred Stock | |||||||||
Stock compensation expense | 211 | 211 | |||||||
Other comprehensive loss | (4,134) | (4,134) | |||||||
Net income | $ 6,791 | 6,791 | |||||||
Ending balance (in shares) at Mar. 31, 2021 | 51,148,782 | 51,148,782 | |||||||
Shareholders' equity ending balance at Mar. 31, 2021 | $ 412,975 | $ 511 | $ 287,321 | $ 5,393 | $ 119,750 |
Condensed Consolidated and Co_4
Condensed Consolidated and Condensed Combined Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating activities | ||
Net income | $ 6,791 | $ 9,606 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation and amortization | 1,690 | 208 |
Stock compensation | 211 | 0 |
Net capital gains | (24) | (5,018) |
Deferred offering costs | 0 | (432) |
Bond amortization and accretion | 588 | 399 |
Issuance of member units as compensation | 0 | 20 |
Equity earnings in affiliates, net of tax | 0 | (702) |
Distributions from equity method investments | 0 | 1,389 |
Deferred income taxes | (610) | 367 |
Deferred financing costs | 42 | 25 |
Changes in operating assets and liabilities: | ||
Accrued investment income | 206 | 48 |
Premiums and other receivables | (12,523) | (4,962) |
Reinsurance recoverable on paid and unpaid losses | (17,698) | (6,422) |
Prepaid reinsurance premiums | (2,327) | (3,606) |
Right of use asset | 494 | (5,721) |
Other assets | (6,154) | (2,791) |
Unpaid loss and loss adjustment expenses | 27,714 | 12,042 |
Unearned premiums | 18,473 | 7,373 |
Funds held under reinsurance agreements | (8,869) | 1,358 |
Reinsurance premiums payable | (94) | (5,522) |
Accounts payable and accrued expenses | (12,899) | 1,299 |
Lease liability | (521) | 5,926 |
Income taxes payable | 2,546 | 2,544 |
Net cash provided by (used in) operating activities | (2,964) | 7,428 |
Investing activities | ||
Payments for capital expenditures | (73) | (504) |
Proceeds from sale of equity method investment | 232 | 3,000 |
Return of capital on equity method investment | 0 | 115 |
Purchase of investments, available for sale | (37,678) | (24,323) |
Proceeds from investments sold, matured or repaid | 20,391 | 12,242 |
Net cash used in investing activities | (17,128) | (9,470) |
Financing activities | ||
Principal payments on debt | (206) | (344) |
Net cash used in financing activities | (206) | (344) |
Net decrease in cash, cash equivalents and restricted cash | (20,298) | (2,386) |
Cash, cash equivalents and restricted cash ‑ beginning of period | 157,234 | 76,068 |
Cash, cash equivalents and restricted cash ‑ end of period | 136,936 | 73,682 |
Disaggregation of cash and restricted cash: | ||
Total cash, cash equivalents and restricted cash | 136,936 | 73,682 |
Supplemental disclosure of cash flow information: | ||
Interest | 385 | 436 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 2 | 6,261 |
Operating cash flows from operating leases | $ 615 | $ 424 |
Business and Basis of Presentat
Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Basis of Presentation | Business and Basis of Presentation In July 2020, Trean Insurance Group, Inc. (together with its wholly owned subsidiaries, the "Company") completed its initial public offering ("IPO") of common stock. Prior to the completion of the IPO, the Company effected the following reorganization transactions: (i) each of Trean Holdings LLC ("Trean"), an insurance services company, and BIC Holdings LLC ("BIC"), a property and casualty insurance holding company, contributed all of their respective assets and liabilities to Trean Insurance Group, Inc., a newly formed direct subsidiary of BIC, in exchange for shares of common stock in Trean Insurance Group, Inc. and (ii) upon the completion of the transfers by Trean and BIC, Trean and BIC were dissolved and distributed in-kind common shares to the pre-IPO unitholders. For the purpose of financial statement disclosures, references to the condensed consolidated financial statements for all post-IPO periods include the accounts of Trean Insurance Group, Inc., along with its wholly owned subsidiaries, after elimination of intercompany accounts and transactions. References to the condensed consolidated financial statements for all pre-IPO periods include the condensed combined financial statements of BIC and Trean, along with their wholly owned subsidiaries, after elimination of intercompany accounts and transactions. All dollar amounts are shown in thousands, except share and per share amounts. The Company provides products and services to the specialty insurance market. Historically, the Company has focused on specialty casualty markets that are believed to be under-served and where the Company’s expertise allows the Company to achieve higher rates, such as niche workers' compensation markets and small- to medium-sized specialty casualty insurance programs. The Company underwrites specialty-casualty insurance products both through programs where the Company partners with other organizations ("Program Partners"), and also through the Company’s own managing general agencies ("Owned MGAs"). The Company also provides Program Partners with a variety of services, including issuing carrier services, claims administration, and reinsurance brokerage from which the Company generates fee-based revenues. The Company's wholly owned subsidiaries include (a) Benchmark Holding Company, a property and casualty insurance holding company, which owns Benchmark Insurance Company ("Benchmark"), a property and casualty insurance company domiciled in the state of Kansas, American Liberty Insurance Company ("ALIC"), a property and casualty insurance company domiciled in the state of Utah, and 7710 Insurance Company, a property and casualty insurance company domiciled in the state of South Carolina; (b) Trean Compstar Holdings, LLC, a limited liability company created originally for the purchase of Compstar Insurance Services LLC, a California-based general agency; and (c) Trean Corporation ("Trean Corp"), a reinsurance intermediary manager and a managing general agent, which consists of the following wholly owned subsidiaries: Trean Reinsurance Services, LLC, a reinsurance intermediary broker; Benchmark Administrators LLC, a claims third-party administrator; and Westcap Insurance Services, LLC, a managing general agent based in California. The accompanying condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to the Quarterly Report on Form 10-Q under the Securities Exchange Act of 1934. Accordingly, they do not contain all of the information included in the Company's annual consolidated financial statements and notes. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation of the Company’s condensed consolidated financial position and results of operations for the periods presented have been included. Although management believes the disclosures and information presented are adequate, these interim condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020 (the "2020 Form 10-K"). Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. Use of estimates While preparing the condensed consolidated financial statements, the Company has made certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements, as well as reported amounts of revenue and expenses during the reporting period. Accordingly, actual results could differ from those estimates. Reported amounts that require extensive use of estimates include the reserves for unpaid losses and loss adjustment expenses ("LAE"), reinsurance recoveries, investments and goodwill and other intangible assets. Except for the captions on the condensed consolidated balance sheets and condensed consolidated statements of comprehensive income, generally, the term loss(es) is used to collectively refer to both loss and LAE. Accounting pronouncements Recently adopted policies In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04). This update provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. This standard is effective for the period between March 12, 2020 and December 31, 2022. The adoption of this standard did not have a material impact on the condensed consolidated financial statements. Pending policies The Company completed its IPO in July 2020, and is an emerging growth company as defined under federal securities laws. As such, the Company has elected to adopt pending accounting policies under the dates required for private companies. Therefore, the dates included within this section reflect the effective dates for the adoption of new accounting policies required by private companies. In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments (ASU 2020-03). This update represents changes to clarify and improve the codification to allow for easier application by eliminating inconsistencies and providing clarification on items such as (i) the application of fair value option disclosures; (ii) the accounting for fees related to modifications of debt; and (iii) aligning the contractual term of a net investment in a lease in accordance with ASC Topic 326, Financial Instruments - Credit Losses , and the lease term determined in accordance with ASC Topic 842, Leases . The Company adopted items (i) and (ii) effective January 1, 2020 and will adopt item (iii) on January 1, 2023. Adoption of this standard has not had, and is not expected to have, a material impact on the condensed consolidated financial statements. In January 2020, the FASB issued ASU No. 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivative and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323 and Topic 815 (ASU 2020-01). This update addresses the accounting for certain equity securities upon the application or discontinuation of the equity method of accounting. Further, the update addresses scope considerations for forward contracts and purchased options on certain securities. ASU 2020-01 is effective for annual periods beginning after December 15, 2021, including interim periods thereafter. The Company will adopt this standard effective January 1, 2022. Adoption of this standard is not expected to have a material impact on the condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (ASU 2016-13). This update requires financial assets measured at amortized cost to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net income. Additionally, credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses, with the amount of the allowance limited to the amount by which the fair value is below the amortized cost. ASU 2016-13 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. The Company will adopt this standard effective January 1, 2023. The Company is currently evaluating the impact of this standard on the condensed consolidated financial statements. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions 7710 Insurance Company Effective October 1, 2020, Benchmark Holding Company acquired 100% ownership of 7710 Insurance Company as well as its associated program manager and agency, 7710 Service Company, LLC and Creekwood Insurance Agency, LLC, for a purchase price of $12,140. 7710 Insurance Company underwrites workers' compensation primarily for emergency services, including firefighters and emergency medical services ("EMS"). 7710 Insurance Company focuses on reducing costs and claims through the implementation of a proprietary safety preparedness and loss control program, created and staffed by experienced firefighters and EMS professionals. The following table summarizes the consideration paid and the amounts of estimated fair value of the net assets acquired and liabilities assumed at the acquisition date: Fair value of total consideration transferred $ 12,140 Recognized amounts of identifiable assets acquired and liabilities assumed: Fixed maturities 895 Cash and cash equivalents 2,704 Accrued investment income 7 Premiums and other receivables 2,618 Reinsurance recoverable 5,069 Prepaid reinsurance premiums 920 Deferred policy acquisition costs 466 Property and equipment 22 Right of use asset 196 Goodwill 2,873 Intangible assets 3,299 Other assets 7,435 Unpaid loss and loss adjustment expenses (8,117) Unearned premiums (3,831) Funds held under reinsurance agreements (421) Accounts payable and accrued expenses (1,112) Lease liability (220) Deferred tax liabilities (394) Debt (269) Net assets acquired $ 12,140 The assessment of fair value, the determination of the liability for unpaid loss and loss adjustment expense assumed, deferred taxes and other payables and receivables are preliminary and are based on the information that was available at the time the consolidated financial statements were prepared. Accordingly, the allocation of purchase price to intangible assets, goodwill, deferred tax assets and liabilities and the liability for unpaid loss and loss adjustment expense is preliminary and, therefore, subject to adjustment in future periods. The Company recorded $2,873 of goodwill associated with the business combination. The goodwill recognized is attributable to the assembled workforce and the expected growth resulting from the acquisition. The Company also recorded preliminary intangible assets totaling $3,299, which are comprised of the following: Useful Life Balance Trade name 15 years $ 458 Customer relationships 10 years 2,841 Total intangible assets $ 3,299 Compstar Holding Company LLC Effective July 15, 2020, Trean Compstar Holdings LLC purchased the remaining 55% ownership interest in Compstar Holding Company LLC ("Compstar"), a holding company along with its wholly owned subsidiary Compstar Insurance Services, a managing general agent, by issuing 6,613,606 shares of the Company’s common stock with a market price of $15 per share on the date of acquisition. Prior to the acquisition date, the Company held a 45% ownership interest in Compstar and accounted for its investment under the equity method. The acquisition-date fair value of the Company’s previous equity interest was revalued using the market price of the shares issued as consideration for the acquisition. As a result, the fair value attributable to the Company’s previous equity interest was $81,167 and the carrying value was $11,321, and the Company therefore recorded a gain of $69,846 from the remeasurement of its previous equity interest. The following table summarizes the consideration paid and the amounts of estimated fair value of the net assets acquired and liabilities assumed at the acquisition date. The assessment of fair value and the determination of deferred taxes and other payables and receivables are preliminary and is based on the information that was available at the time the condensed consolidated financial statements were prepared. Accordingly, the allocation of purchase price to intangible assets and to deferred tax assets and liabilities is preliminary and, therefore, subject to adjustment in future periods. Fair value of total consideration transferred $ 99,204 Previous investment in subsidiary 11,321 Fair value adjustment to prior investment 69,846 Fair value of assets acquired and liabilities assumed 180,371 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents 11,891 Premiums and other receivables 3,632 Property and equipment 444 Right of use asset 1,020 Goodwill 134,428 Intangible assets, net 73,954 Other assets 184 Accounts payable and accrued expenses (11,328) Lease liability (1,302) Deferred tax liabilities (12,487) Debt (20,065) Net assets acquired $ 180,371 The Company recorded $134,428 of goodwill associated with the business combination. The goodwill recognized is attributable to the assembled workforce, the expected growth resulting from the acquisition and synergies gained through the reduction of operating expenses. The Company also recorded intangible assets totaling $73,954, which are comprised of the following: Useful Life Balance Trade name 15 years $ 3,157 Customer relationships 14 years 70,797 Total intangible assets $ 73,954 LCTA Risk Services, Inc. Effective April 1, 2020, Trean Corp purchased 100% of the operating assets and assumed the liabilities of LCTA Risk Services, Inc. The total purchase price was $1,400. The following table summarizes the consideration paid and the amounts of estimated fair value of the net assets acquired and liabilities assumed at the acquisition date: Fair value of total consideration transferred $ 1,400 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents 302 Premiums and other receivables 55 Property and equipment 63 Goodwill 517 Intangible assets, net 482 Other assets 12 Accounts payable (17) Income taxes payable (14) Net assets acquired $ 1,400 The Company recorded $517 of goodwill associated with the business combination. The goodwill recognized is attributable to the expected growth resulting from the acquisition and the synergies gained through the reduction of operating expenses. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company’s financial instruments include assets and liabilities carried at fair value. The inputs to valuation techniques used to measure fair value are prioritized into a three level hierarchy. The fair value hierarchy is as follows: Level 1 : Fair values primarily based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 : Fair values primarily based on observable inputs, other than quoted prices included in Level 1, or based on prices for similar assets and liabilities. Level 3 : Fair values primarily based on valuations derived when one or more of the significant inputs are unobservable. With little or no observable market, the determination of fair value uses considerable judgment and represents the Company’s best estimate of an amount that could be realized in a market exchange for the asset or liability. The Company classifies the financial asset or liability by level based upon the lowest level input that is significant to the determination of the fair value. The following tables present the estimated fair value of the Company’s significant financial instruments. March 31, 2021 Level 1 Level 2 Level 3 Total Fixed maturities: U.S. government and government securities $ 16,833 $ 175 $ — $ 17,008 Foreign governments — 101 — 101 States, territories and possessions — 8,393 — 8,393 Political subdivisions of states territories and possessions — 30,451 — 30,451 Special revenue and special assessment obligations — 91,175 — 91,175 Industrial and public utilities — 93,289 — 93,289 Commercial mortgage-backed securities — 13,256 — 13,256 Residential mortgage-backed securities — 87,687 — 87,687 Other loan-backed securities — 36,419 — 36,419 Hybrid securities — 352 — 352 Total fixed maturities 16,833 361,298 — 378,131 Equity securities: Preferred stock — 237 — 237 Common stock — 741 2,000 2,741 Total equity securities — 978 2,000 2,978 Total investments $ 16,833 $ 362,276 $ 2,000 $ 381,109 Funds held under reinsurance agreements — 151,268 — 151,268 Debt — 32,175 — 32,175 December 31, 2020 Level 1 Level 2 Level 3 Total Fixed maturities: U.S. government and government securities $ 17,471 $ — $ — $ 17,471 Foreign governments — 302 — 302 States, territories and possessions — 7,774 — 7,774 Political subdivisions of states, territories and possessions — 33,212 — 33,212 Special revenue and special assessment obligations — 81,714 — 81,714 Industrial and public utilities — 113,741 — 113,741 Commercial mortgage-backed securities — 18,066 — 18,066 Residential mortgage-backed securities — 93,017 — 93,017 Other loan-backed securities — 39,945 — 39,945 Hybrid securities — 362 — 362 Total fixed maturities 17,471 388,133 — 405,604 Equity securities: Preferred stock — 240 — 240 Common stock 958 576 2,000 3,534 Total equity securities 958 816 2,000 3,774 Total investments $ 18,429 $ 388,949 $ 2,000 $ 409,378 Funds held under reinsurance agreements $ — $ 174,704 $ — $ 174,704 Debt — 32,381 — 32,381 Bonds and equity securities: The Company, in conjunction with its third-party pricing service provider, uses a variety of sources to estimate the fair value of investments such as Reuters, Iboxx, PricingDirect, ICE BofAML Index, ICE Data Services, and for equities, Bloomberg. Equity securities are valued at the closing price on the exchange on which they are primarily traded as provided by a third-party pricing service. Fixed income securities are generally valued at an evaluated bid as provided by a third-party pricing service. Securities and other assets generally valued using third-party pricing services may also be valued at broker/dealer bid quotations. Values obtained from third-party pricing services can utilize several data sources for inputs such as transaction data, yield, quality, coupon rate, maturity, issue type, trading characteristics and market activity. To validate the reasonableness of the quoted prices, the Company performs various qualitative and quantitative procedures such as analysis of recent trading activity, analytical review of fair values and an evaluation of the underlying pricing methodologies. Based on these procedures, the Company did not adjust the prices or quotes from the third-party pricing service. Funds held under reinsurance agreements: The Company holds certain investments as collateral under reinsurance contracts and values these investments consistent with its other investments using third-party pricing services. To validate the reasonableness of the quoted prices, the Company performs various qualitative and quantitative procedures such as analysis of recent activity, analytical review of fair values and an evaluation of the underlying pricing methodologies. Based on these procedures, the Company did not adjust the prices or quotes from the third-party pricing service. Debt: The Company holds debt related to its secured credit facility. The Company has determined that the remaining balance of the debt reflected its fair value as this would represent the total amount to repay the debt. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments The cost or amortized cost, gross unrealized gains, gross unrealized losses, and estimated fair value of the Company's investments are as follows: March 31, 2021 Cost or Gross Gross Fair Value Fixed maturities: U.S. government and government securities $ 16,796 $ 243 $ (31) $ 17,008 Foreign governments 100 1 — 101 States, territories and possessions 8,273 163 (43) 8,393 Political subdivisions of states, territories and possessions 29,770 881 (200) 30,451 Special revenue and special assessment obligations 89,087 2,957 (869) 91,175 Industrial and public utilities 88,996 4,422 (129) 93,289 Commercial mortgage-backed securities 12,400 891 (35) 13,256 Residential mortgage-backed securities 88,020 1,154 (1,487) 87,687 Other loan-backed securities 35,873 570 (24) 36,419 Hybrid securities 356 3 (7) 352 Total fixed maturities available for sale 369,671 11,285 (2,825) 378,131 Equity securities: Preferred stock 243 1 (7) 237 Common stock 741 2,000 — 2,741 Total equity securities 984 2,001 (7) 2,978 Total investments $ 370,655 $ 13,286 $ (2,832) $ 381,109 December 31, 2020 Cost or Gross Gross Fair Value Fixed maturities: U.S. government and government securities $ 17,135 $ 336 $ — $ 17,471 Foreign governments 300 2 — 302 States, territories and possessions 7,500 274 — 7,774 Political subdivisions of states, territories and possessions 31,759 1,453 — 33,212 Special revenue and special assessment obligations 77,329 4,422 (37) 81,714 Industrial and public utilities 107,017 6,768 (44) 113,741 Commercial mortgage-backed securities 16,242 1,848 (24) 18,066 Residential mortgage-backed securities 91,478 1,626 (87) 93,017 Other loan-backed securities 39,293 719 (67) 39,945 Hybrid securities 356 6 — 362 Total fixed maturities available for sale 388,409 17,454 (259) 405,604 Equity securities: Preferred stock 243 — (3) 240 Common stock 1,554 2,053 (73) 3,534 Total equity securities 1,797 2,053 (76) 3,774 Total investments $ 390,206 $ 19,507 $ (335) $ 409,378 The following table illustrates the Company’s gross unrealized losses and fair value of fixed maturities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position: March 31, 2021 Less Than 12 Months 12 Months or More Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Fixed maturities: U.S. government and government securities $ 6,222 $ (31) $ — $ — $ 6,222 $ (31) Foreign governments — — — — — — States, territories and possessions 2,282 (43) — — 2,282 (43) Political subdivisions of states, territories and possessions 6,449 (200) — — 6,449 (200) Special revenue and special assessment obligations 28,661 (869) — — 28,661 (869) Industrial and public utilities 3,557 (116) 986 (13) 4,543 (129) Commercial mortgage-backed securities 8 — 987 (35) 995 (35) Residential mortgage-backed securities 56,009 (1,460) 755 (27) 56,764 (1,487) Other loan-backed securities 1,086 (7) 3,483 (17) 4,569 (24) Hybrid securities 243 (7) — — 243 (7) Total bonds $ 104,517 $ (2,733) $ 6,211 $ (92) $ 110,728 $ (2,825) December 31, 2020 Less Than 12 Months 12 Months or More Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Fixed maturities: U.S. government and government securities $ 4,518 $ — $ — $ — $ 4,518 $ — Foreign governments — — — — — — States, territories and possessions — — — — — — Political subdivisions of states, territories and possessions — — — — — — Special revenue and special assessment obligations 2,923 (37) — — 2,923 (37) Industrial and public utilities 2,106 (44) — — 2,106 (44) Commercial mortgage-backed securities 999 (24) — — 999 (24) Residential mortgage-backed securities 8,811 (74) 262 (13) 9,073 (87) Other loan-backed securities 2,037 (10) 9,036 (57) 11,073 (67) Hybrid securities 250 — — — 250 — Total bonds $ 21,644 $ (189) $ 9,298 $ (70) $ 30,942 $ (259) The unrealized losses on the Company’s available for sale securities as of March 31, 2021 and December 31, 2020 were primarily attributable to an increase in interest rates, which predominantly impacted fixed maturities acquired since the second quarter of 2020. The amortized cost and estimated fair value of fixed maturities as of March 31, 2021, by contractual maturity, are as follows: Cost or Amortized Cost Fair Value Available for sale: Due in one year or less $ 27,169 $ 27,512 Due after one year but before five years 81,928 85,473 Due after five years but before ten years 62,739 65,510 Due after ten years 61,542 62,274 Commercial mortgage-backed securities 12,400 13,256 Residential mortgage-backed securities 88,020 87,687 Other loan-backed securities 35,873 36,419 Total $ 369,671 $ 378,131 Actual maturities may differ from contractual maturities as issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Realized gains and losses on investments included in the condensed consolidated statements of operations for the three months ended March 31, 2021 and 2020 are as follows: Three Months Ended March 31, 2021 2020 Fixed maturities: Gains $ 80 $ 119 Losses (67) — Total fixed maturities 13 119 Equity securities: Equity method investments: Gains — 3,115 Total equity securities — 3,115 Total net investment realized gains (losses) $ 13 $ 3,234 Net investment income consists of the following for the three months ended March 31, 2021 and 2020: Three Months Ended March 31, 2021 2020 Fixed maturities $ 1,560 $ 1,472 Preferred stock 30 (14) Common stock — 1,799 Interest earned on cash and short-term investments 2 15 Net investment income $ 1,592 $ 3,272 |
Equity Method Investments
Equity Method Investments | 3 Months Ended |
Mar. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method Investments The Company had investments in Compstar and Trean Intermediaries ("TRI"). Equity earnings and losses are reported in equity earnings in affiliates, net of tax on the condensed consolidated statements of operations. On July 15, 2020, the Company purchased the remaining 55% ownership interest in Compstar (See Note 2) and, as a result, Compstar is no longer recorded as an equity method investment. For the three months ended March 31, 2020, the Company recorded earnings of $702 and received distributions of $1,278. On January 3, 2020, the Company sold 15% of its previous 25% ownership in TRI for cash proceeds of $3,000. The Company currently maintains a 10% ownership interest in TRI. As a result of its significant ownership reduction and its lack of significant influence over the operations and policies of TRI, the Company reclassified its TRI investment, at fair value, to investments in common stock in the first quarter of 2020. The Company realized a gain on the sale of $3,000 for the three months ended March 31, 2020, which is included in net realized capital gains on the condensed consolidated statements of operations. The Company subsequently re-measured its TRI investment shares resulting in an unrealized gain of $2,000, which is recorded in net investment income on the condensed consolidated statement of operations for the three months ended March 31, 2020. The Company received distributions of $225 for the three months ended March 31, 2020. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt consisted of the following: March 31, 2021 December 31, 2020 Secured credit facility $ 32,175 $ 32,381 Less: unamortized deferred financing costs (702) (744) Net debt $ 31,473 $ 31,637 Secured Credit Facility In April 2018, Trean Corp entered into a credit agreement with a bank which includes a term loan facility totaling $27,500 and a revolving credit facility of $3,000. Borrowings are secured by substantially all of the assets of Trean and its subsidiaries. On May 26, 2020, the Company entered into a new Amended and Restated Credit Agreement which, among other things, extended the Company's credit facility for a period of five years through May 26, 2025 and increased its term loan facility by $11,707, resulting in a total term loan debt amount of $33,000 at the time of closing. The loan has a variable interest rate of LIBOR plus 4.50%, which was 4.75% and 4.72% as of March 31, 2021 and December 31, 2020, respectively. The outstanding principal balance of the loan is to be repaid in quarterly installments which escalate from $206 to $825. All equity securities of the subsidiaries of Trean Insurance Group, Inc. (other than Benchmark Holding Company and its subsidiaries) have been pledged as collateral. During the three months ended March 31, 2021 and 2020, the Company recorded $385 and $334 of interest expense, respectively, associated with its credit facility. The terms of the credit facility require the Company to maintain certain financial covenants and ratios. The Company was in compliance with all covenants and ratios as of March 31, 2021 and December 31, 2020. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Revenue from contracts with customers, included in other revenue, includes brokerage, management, third-party administrative and consulting and other fee-based revenue. Revenue from contracts with customers was $4,655 and $4,392 for the three months ended March 31, 2021 and 2020, respectively. The following table presents the revenues recognized from contracts with customers included in the condensed consolidated statements of operations. Three Months Ended March 31, 2021 2020 Brokerage $ 3,455 $ 3,693 Managing general agent fees 289 154 Third-party administrator fees 378 384 Consulting and other fee-based revenue 533 161 Total revenue from contracts with customers $ 4,655 $ 4,392 The Company did not have any contract liabilities as of March 31, 2021 or December 31, 2020. The following table provides information related to the contract assets from contracts with customers. Contract assets are included within other assets on the condensed consolidated balance sheets. March 31, 2021 December 31, 2020 Contract assets $ 5,360 $ 3,405 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense for interim periods is measured using an estimated effective income tax rate for the annual period. The Company's effective tax rate was 21.9% for the three months ended March 31, 2021. The effective tax rate differed from the statutory rate primarily due to the impact of state taxes. The Company’s effective tax rate was 24.6% for the three months ended March 31, 2020. The effective tax rate differed from the statutory rate primarily due to the impact of state taxes and temporary differences associated with the gains recorded on the sale and subsequent re-measurement of the Company’s TRI investment shares in the quarter ended March 31, 2020. |
Liability for Unpaid Losses and
Liability for Unpaid Losses and Loss Adjustment Expense | 3 Months Ended |
Mar. 31, 2021 | |
Insurance [Abstract] | |
Liability for Unpaid Losses and Loss Adjustment Expense | Liability for Unpaid Losses and Loss Adjustment Expense The following table represents a reconciliation of changes in the liability for unpaid losses and LAE. Three Months Ended March 31, 2021 2020 Unpaid losses and LAE reserves at beginning of period $ 457,817 $ 406,716 Less losses ceded through reinsurance (335,655) (304,005) Net unpaid losses and LAE at beginning of period 122,162 102,711 Incurred losses and LAE related to: Current period 24,907 14,169 Prior period (26) (1,235) Total incurred losses and LAE 24,881 12,934 Paid losses and LAE, net of reinsurance, related to: Current period 3,523 1,198 Prior period 11,146 7,795 Total paid losses and LAE 14,669 8,993 Net unpaid losses and LAE at end of period 132,374 106,652 Plus losses ceded through reinsurance 353,158 312,105 Unpaid losses and LAE reserves at end of period $ 485,532 $ 418,757 During the three months ended March 31, 2021, the reserves for unpaid losses and LAE developed favorably by $26. During the three months ended March 31, 2020, the reserves for unpaid losses and LAE developed favorably by $1,235, primarily attributable to the development in the Company’s workers’ compensation book of business. |
Reinsurance
Reinsurance | 3 Months Ended |
Mar. 31, 2021 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | Reinsurance The Company utilizes reinsurance contracts to reduce its exposure to losses in all aspects of its insurance business. Such reinsurance permits recovery of a portion of losses from reinsurers, although it does not relieve the Company from its primary liability to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company evaluates the financial strength of potential reinsurers and continually monitors the financial condition of its reinsurers. A summary of the impact of ceded reinsurance on premiums written and premiums earned is as follows: Three Months Ended March 31, 2021 2020 Gross Assumed Ceded Net Gross Assumed Ceded Net Written premiums $ 144,898 $ 1,832 $ (89,484) $ 57,246 $ 105,977 $ 1,882 $ (81,632) $ 26,227 Earned premiums 126,404 1,895 (87,165) 41,134 98,543 1,943 (78,027) 22,459 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Leases | LeasesThe Company's leases consist of operating leases for office space and equipment. The Company determines if an arrangement is a lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease right-of-use assets are recognized at commencement date based on the present value of lease payments over the lease term. As the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Some of the Company's leases include options to extend the term, which is only included in the lease liability and right-of-use asset calculation when it is reasonably certain the Company will exercise that option. Our leases have remaining terms ranging from one month to 51 months, some of which have options to extend the lease for up to 5 years. As of March 31, 2021, the lease liability and right-of-use assets did not include the impact of any lease extension options as it is not reasonably certain that the Company will exercise the extension options. Total lease expense for the three months ended March 31, 2021 was $674, inclusive of $75 in variable lease expense. Total lease expense for the three months ended March 31, 2020 was $579, inclusive of $120 in variable lease expense. The Company also sublets some of its leased office space and recorded $18 and $12 of sublease income for the three months ended March 31, 2021 and 2020, respectively, which is included in other income on the condensed consolidated statement of operations. Supplemental balance sheet information, the weighted average remaining lease term and weighted average discount rate related to leases were as follows: March 31, 2021 December 31, 2020 Right of use asset $ 5,844 $ 6,338 Lease liability $ 6,372 $ 6,893 Weighted average remaining lease term 3.04 years 3.26 years Weighted average discount rate 6.37 % 6.37 % Future maturities of lease liabilities as of March 31, 2021 are as follows: Operating Leases 2021 $ 1,833 2022 2,363 2023 1,781 2024 929 2025 94 Total lease payments 7,000 Less: imputed interest (628) Total lease liabilities $ 6,372 |
Equity
Equity | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Equity | Equity Initial Public Offering and Reorganization On July 20, 2020, Trean Insurance Group, Inc. closed the sale of 10,714,286 shares of its common stock in its IPO, comprised of 7,142,857 shares issued and sold by Trean Insurance Group, Inc. and 3,571,429 shares sold by selling stockholders. On July 22, 2020, Trean Insurance Group, Inc. closed the sale of an additional 1,207,142 shares by certain selling stockholders in the IPO pursuant to the exercise of the underwriters’ option to purchase additional shares to cover over-allotments. The IPO price per share was $15.00. The aggregate IPO price for all shares sold in the IPO was approximately $107,142 and the aggregate initial public offering price for all shares sold by the selling stockholders in the IPO was approximately $71,678. The shares began trading on the Nasdaq Global Select Market on July 16, 2020 under the symbol "TIG". The offer and sale was pursuant to a registration statement on Form S-1 (File No. 333-239291), which was declared effective by the SEC on July 15, 2020. Trean Insurance Group, Inc. received net proceeds from the sale of shares in the IPO of approximately $93,139 after deducting underwriting discounts and commissions of $7,500 and estimated offering expenses of $6,503. Trean Insurance Group, Inc. did not receive any proceeds from the sale of shares by the selling stockholders. In addition, and in conjunction with its IPO, Trean Insurance Group, Inc. issued 6,613,606 shares of common stock, with a purchase price value of $99,204, to acquire the remaining 55% ownership in Compstar Holding Company LLC. Prior to the completion of the above offering, the Company effected the following reorganization transactions: (i) each of Trean and BIC contributed all of their respective assets and liabilities to Trean Insurance Group, Inc., a newly formed direct subsidiary of BIC, in exchange for shares of common stock in Trean Insurance Group, Inc. and (ii) upon the completion of the transfers by Trean and BIC, Trean and BIC were dissolved and distributed in-kind common shares to the pre-IPO unitholders. Common Stock The Company currently has authorized 600,000,000 shares of common stock with a par value of $0.01. As of March 31, 2021, there were 51,148,782 shares of common stock issued and outstanding. Members' Equity Prior to the IPO of Trean Insurance Group, Inc., the Company had three classes of ownership units, each with its respective rights, preferences and privileges as follows: 1) Class A Units : Received an allocation of profits and losses incurred by the Company as well as maintained the right to receive distributions, along with Class B Units, on a pro rata basis prior to distributions made to other classes of ownership units. 2) Class B Units : Received an allocation of profits and losses incurred by the Company as well as maintained the right to receive distributions, along with Class A Units, on a pro rata basis prior to distributions made to other classes of ownership units. Class B maintained both voting and non-voting units. Each Class B Voting Unit was entitled to one vote per Class B Voting Unit on each matter to which the members were entitled to vote. Class B Non-Voting Units maintained all rights, preferences and privileges allowed to Class B Voting Units with the exception of voting rights. 3) Class C Units : Received an allocation of profits and losses incurred by the Company. Participating Class C Units maintained the right to receive distributions after any Class A or Class B units based on the unit holders’ pro rata share. As part of the corporate reorganization performed in conjunction with the IPO of Trean Insurance Group, all ownership units were exchanged for a total of 37,386,394 shares of the Company's common stock. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per ShareBasic earnings per share ("EPS") is computed by dividing net income by the weighted average number of shares outstanding during reported periods. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock of the Company during reported periods and is calculated using the treasury stock method. As a result of the Company's third quarter IPO and corporate reorganization, the number of shares used to compute earnings per share for pre-reorganization 2020 periods presented was retrospectively adjusted to reflect the recapitalization akin to a split-like situation. The following table presents the calculation of basic and diluted EPS of common stock: Three Months Ended March 31, 2021 2020 Net income - basic and diluted $ 6,791 $ 9,606 Weighted average number of shares outstanding - basic 51,148,782 37,386,394 Effect of dilutive securities: Restricted stock units 31,038 — Dilutive shares 31,038 — Weighted average number of shares outstanding - diluted 51,179,820 37,386,394 Earnings per share: Basic $ 0.13 $ 0.26 Diluted $ 0.13 $ 0.26 For the three months ended March 31, 2021, a total of 60,729 stock options with an exercise price of $17.50 per share were excluded from the calculation of diluted EPS because the options' exercise price was greater than the average market price of common shares, resulting in an antidilutive effect. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following table presents the changes in accumulated other comprehensive income for unrealized gains and losses on available-for-sale securities: Three Months Ended March 31, 2021 2020 Balance at beginning of period $ 9,527 $ 4,821 Other comprehensive loss, net of tax: Unrealized investment loss: Unrealized investment gains arising during the period (5,220) (1,223) Income tax benefit (1,096) (256) Unrealized investment loss, net of tax (4,124) (967) Less: reclassification adjustments to: Net realized investment gains included in net realized capital gains 13 119 Income tax expense 3 26 Total reclassifications included in net income, net of tax 10 93 Other comprehensive loss (4,134) (1,060) Balance at end of period $ 5,393 $ 3,761 |
Stock Compensation
Stock Compensation | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock Compensation | Stock CompensationAs of March 31, 2021, the Company has one incentive plan, the Trean Insurance Group, Inc. 2020 Omnibus Incentive Plan, (the "2020 Omnibus Plan"). The purposes of the 2020 Omnibus Plan are to provide additional incentive to selected officers, employees, non-employee directors, independent contractors, and consultants of the Company whose contributions are essential to the growth and success of the business of the Company and its affiliates, to strengthen the commitment and motivate such individuals to faithfully and diligently perform their responsibilities and to attract competent and dedicated individuals whose efforts will result in the long-term growth and profitability of the Company and its affiliates. The 2020 Omnibus Plan is administered by the Compensation, Nominating and Corporate Governance Committee of the Company's board of directors and provides for the issuance of up to 5,058,085 shares of the Company's common stock granted in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, stock bonuses, other stock awards or any combination of the foregoing. Stock Options Compensation expense is recognized for all stock compensation arrangements by the Company. Stock compensation expense related to stock option awards was $35 for the three months ended March 31, 2021. Employee stock option awards granted set forth, among other things, the option exercise price, the option term, provisions regarding option exercisability and whether the option is intended to be an incentive stock option or a nonqualified stock option. Stock options may be granted to employees at such exercise prices as the Company’s board of directors may determine but not less than 100% of the fair market value of the underlying stock as of the date of grant. Employee options vest one third annually over a period of three years and have contractual terms of 10 years from the date of grant. The fair value of each time-based vesting option award is estimated on the date of grant using the Black-Scholes option pricing model that uses assumptions noted in the following table. The Company’s expected volatility for the period is based on a weighted average expected volatility of an industry peer group of insurance companies of similar size, life cycle and lines of business. Expected term is calculated using the simplified method taking into consideration the option's contractual life and vesting terms. The Company’s stock option grants qualify as plain vanilla options and as such the Company uses the simplified method in estimating its expected option term as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its common shares have been publicly traded. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Expected dividend yields were not used in the fair value computations as the Company has never declared or paid dividends on its common stock and currently intends to retain earnings for use in operations. Fiscal 2021 Expected volatility 29.8% Expected term 6 years Risk-free interest rate 1.32% A summary of the status of the Company's stock option activity as of March 31, 2021 and changes during the three months then ended are as follows: Stock Options Weighted Average Exercise Price Balance outstanding, December 31, 2020 89,920 $ 15.00 Granted 60,729 $ 17.50 Balance outstanding, March 31, 2021 150,649 $ 16.01 Options exercisable, March 31, 2021 — $ — The following table summarizes information regarding stock options outstanding as of March 31, 2021: Options Outstanding Options Vested or Expected to Vest Stock Options Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term Aggregate Intrinsic Value Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term Aggregate Intrinsic Value 2020 Omnibus Plan 150,649 $ 16.01 9.57 years $ 103 150,649 $ 16.01 9.57 years $ 103 The weighted average grant-date fair value of options granted in the three months ended March 31, 2021 was $5.49. As of March 31, 2021, total unrecognized compensation cost related to stock options was $636 and is expected to be recognized over a weighted average period of approximately 1.5 years. Restricted Stock Units Compensation expense relating to restricted stock unit grants was $176 for the three months ended March 31, 2021. As of March 31, 2021, there was $5,259 of total unrecognized compensation cost related to non-vested restricted stock unit grants, which is expected to be recognized over a weighted average life of 2.8 years. The Company has granted time-based restricted stock units ("RSUs"), performance stock units ("PSUs") and market-based stock units ("MSUs") to certain key employees as part of the Company's long-term incentive program. The estimated fair value of restricted stock units is based on the grant date closing price of the Company's stock for time-based and performance-based vesting awards. A Monte Carlo valuation model is used to estimate the fair value for market-based vesting awards. RSUs generally vest in three equal annual installments beginning one year from the grant date and are amortized as compensation expense over the three-year vesting period. The Company has also granted time-based restricted stock units to non-employee directors as part of the Company's annual director compensation program. Each time-based restricted stock grant to non-employee directors vests on the day immediately preceding the next annual meeting of stockholders following the date of grant. The grants are amortized as director compensation expense over the twelve-month vesting period. The Company recognizes compensation expense on PSUs ratably over the requisite performance period of the award and to the extent management views the performance goal attainment as probable. The Company recognizes compensation expense on MSUs ratably over the requisite performance period of the award. During the quarter, the Company granted PSUs to certain key employees as part of the Company's 2020 Omnibus Plan. The number of shares earned is based on the Company’s achievement of pre-established target threshold goals for total gross written premiums over a three-year performance measurement period. The performance goals allow for a payout ranging from 0% to 200% of the target award. If performance satisfies minimum requirements to result in shares being awarded, the number of shares will be determined between 50% and 200% of target thresholds, as defined in the applicable award agreements. Any earned PSU will vest if the employee’s service has been continuous through the vesting date. Any PSU not earned because of the level of achievement of the performance goal at the end of the performance period will be immediately forfeited. The grant date fair value of the PSUs was determined based on the grant date closing price of the Company’s stock. During the quarter, the Company granted MSUs to certain key employees as part of the Company's 2020 Omnibus Plan. The number of restricted stock units earned is based on the Company’s cumulative total shareholder return ("TSR"), as defined in the agreement, over a three-year performance measurement period. If TSR satisfies minimum requirements to result in shares being awarded, the number of shares will be determined between 50% and 200% shown in the table below. Any MSU not earned because of the level of achievement of the performance goal at the end of the performance period will be immediately forfeited. Grant date fair values were determined using a Monte Carlo valuation model based on the following assumptions: Fiscal 2021 Total grant date fair value $ 845 Total grant date fair value per share $ 13.92 Expected volatility 35.0 % Weighted average expected life 2.77 years Risk-free interest rate 0.27 % The percent of the target MSU that will be earned based on the Company’s TSR is as follows: Cumulative TSR % Percent of Units Vested Below 25.1% 0% 25.1% 50% 47.2% 100% 69.3% and above 200% A summary of the status of the Company’s non-vested restricted stock unit activity as of March 31, 2021 and changes during the three-month period then ended is as follows: Shares Weighted Average Grant Date Fair Value Non-vested outstanding, December 31, 2020 111,588 $ 14.99 Granted 242,902 $ 16.61 Non-vested outstanding, March 31, 2021 354,490 $ 16.10 |
Transactions with Related Parti
Transactions with Related Parties | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Transactions with Related Parties | Transactions with Related Parties The Company recorded $50 of revenue for consulting services provided to TRI for the three months ended March 31, 2021 and 2020, respectively. Effective July 15, 2020, Trean Compstar Holdings LLC purchased the remaining ownership interest in Compstar (See Note 2). Prior to the acquisition, the Company owned a 45% interest in Compstar, a program manager that handles the underwriting, premium collection and servicing of insurance policies for the Company. The Company recorded $46,282 of gross earned premiums resulting in gross commissions of $9,972 due to Compstar for the three months ended March 31, 2020. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsEvents or transactions that occur after the balance sheet date, but before the condensed consolidated financial statements are complete, are reviewed by the Company to determine if they are to be recognized and/or disclosed as appropriate.All of the effects of subsequent events that provide additional evidence about conditions that existed at the condensed consolidated balance sheet date, including the estimates inherent in the process of preparing the condensed consolidated financial statements, are recognized in the condensed consolidated financial statements. |
Business and Basis of Present_2
Business and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of estimates | Use of estimates While preparing the condensed consolidated financial statements, the Company has made certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements, as well as reported amounts of revenue and expenses during the reporting period. Accordingly, actual results could differ from those estimates. Reported amounts that require extensive use of estimates include the reserves for unpaid losses and loss adjustment expenses ("LAE"), reinsurance recoveries, investments and goodwill and other intangible assets. Except for the captions on the condensed consolidated balance sheets and condensed consolidated statements of comprehensive income, generally, the term loss(es) is used to collectively refer to both loss and LAE. |
Accounting pronouncements | Accounting pronouncements Recently adopted policies In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04). This update provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. This standard is effective for the period between March 12, 2020 and December 31, 2022. The adoption of this standard did not have a material impact on the condensed consolidated financial statements. Pending policies The Company completed its IPO in July 2020, and is an emerging growth company as defined under federal securities laws. As such, the Company has elected to adopt pending accounting policies under the dates required for private companies. Therefore, the dates included within this section reflect the effective dates for the adoption of new accounting policies required by private companies. In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments (ASU 2020-03). This update represents changes to clarify and improve the codification to allow for easier application by eliminating inconsistencies and providing clarification on items such as (i) the application of fair value option disclosures; (ii) the accounting for fees related to modifications of debt; and (iii) aligning the contractual term of a net investment in a lease in accordance with ASC Topic 326, Financial Instruments - Credit Losses , and the lease term determined in accordance with ASC Topic 842, Leases . The Company adopted items (i) and (ii) effective January 1, 2020 and will adopt item (iii) on January 1, 2023. Adoption of this standard has not had, and is not expected to have, a material impact on the condensed consolidated financial statements. In January 2020, the FASB issued ASU No. 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivative and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323 and Topic 815 (ASU 2020-01). This update addresses the accounting for certain equity securities upon the application or discontinuation of the equity method of accounting. Further, the update addresses scope considerations for forward contracts and purchased options on certain securities. ASU 2020-01 is effective for annual periods beginning after December 15, 2021, including interim periods thereafter. The Company will adopt this standard effective January 1, 2022. Adoption of this standard is not expected to have a material impact on the condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (ASU 2016-13). This update requires financial assets measured at amortized cost to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net income. Additionally, credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses, with the amount of the allowance limited to the amount by which the fair value is below the amortized cost. ASU 2016-13 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. The Company will adopt this standard effective January 1, 2023. The Company is currently evaluating the impact of this standard on the condensed consolidated financial statements. |
Fair value measurements | Fair Value Measurements The Company’s financial instruments include assets and liabilities carried at fair value. The inputs to valuation techniques used to measure fair value are prioritized into a three level hierarchy. The fair value hierarchy is as follows: Level 1 : Fair values primarily based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 : Fair values primarily based on observable inputs, other than quoted prices included in Level 1, or based on prices for similar assets and liabilities. Level 3 : Fair values primarily based on valuations derived when one or more of the significant inputs are unobservable. With little or no observable market, the determination of fair value uses considerable judgment and represents the Company’s best estimate of an amount that could be realized in a market exchange for the asset or liability. The Company classifies the financial asset or liability by level based upon the lowest level input that is significant to the determination of the fair value. The following tables present the estimated fair value of the Company’s significant financial instruments. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed | The following table summarizes the consideration paid and the amounts of estimated fair value of the net assets acquired and liabilities assumed at the acquisition date: Fair value of total consideration transferred $ 12,140 Recognized amounts of identifiable assets acquired and liabilities assumed: Fixed maturities 895 Cash and cash equivalents 2,704 Accrued investment income 7 Premiums and other receivables 2,618 Reinsurance recoverable 5,069 Prepaid reinsurance premiums 920 Deferred policy acquisition costs 466 Property and equipment 22 Right of use asset 196 Goodwill 2,873 Intangible assets 3,299 Other assets 7,435 Unpaid loss and loss adjustment expenses (8,117) Unearned premiums (3,831) Funds held under reinsurance agreements (421) Accounts payable and accrued expenses (1,112) Lease liability (220) Deferred tax liabilities (394) Debt (269) Net assets acquired $ 12,140 The following table summarizes the consideration paid and the amounts of estimated fair value of the net assets acquired and liabilities assumed at the acquisition date. The assessment of fair value and the determination of deferred taxes and other payables and receivables are preliminary and is based on the information that was available at the time the condensed consolidated financial statements were prepared. Accordingly, the allocation of purchase price to intangible assets and to deferred tax assets and liabilities is preliminary and, therefore, subject to adjustment in future periods. Fair value of total consideration transferred $ 99,204 Previous investment in subsidiary 11,321 Fair value adjustment to prior investment 69,846 Fair value of assets acquired and liabilities assumed 180,371 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents 11,891 Premiums and other receivables 3,632 Property and equipment 444 Right of use asset 1,020 Goodwill 134,428 Intangible assets, net 73,954 Other assets 184 Accounts payable and accrued expenses (11,328) Lease liability (1,302) Deferred tax liabilities (12,487) Debt (20,065) Net assets acquired $ 180,371 Fair value of total consideration transferred $ 1,400 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents 302 Premiums and other receivables 55 Property and equipment 63 Goodwill 517 Intangible assets, net 482 Other assets 12 Accounts payable (17) Income taxes payable (14) Net assets acquired $ 1,400 |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class | The Company also recorded preliminary intangible assets totaling $3,299, which are comprised of the following: Useful Life Balance Trade name 15 years $ 458 Customer relationships 10 years 2,841 Total intangible assets $ 3,299 Useful Life Balance Trade name 15 years $ 3,157 Customer relationships 14 years 70,797 Total intangible assets $ 73,954 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value Options | The following tables present the estimated fair value of the Company’s significant financial instruments. March 31, 2021 Level 1 Level 2 Level 3 Total Fixed maturities: U.S. government and government securities $ 16,833 $ 175 $ — $ 17,008 Foreign governments — 101 — 101 States, territories and possessions — 8,393 — 8,393 Political subdivisions of states territories and possessions — 30,451 — 30,451 Special revenue and special assessment obligations — 91,175 — 91,175 Industrial and public utilities — 93,289 — 93,289 Commercial mortgage-backed securities — 13,256 — 13,256 Residential mortgage-backed securities — 87,687 — 87,687 Other loan-backed securities — 36,419 — 36,419 Hybrid securities — 352 — 352 Total fixed maturities 16,833 361,298 — 378,131 Equity securities: Preferred stock — 237 — 237 Common stock — 741 2,000 2,741 Total equity securities — 978 2,000 2,978 Total investments $ 16,833 $ 362,276 $ 2,000 $ 381,109 Funds held under reinsurance agreements — 151,268 — 151,268 Debt — 32,175 — 32,175 December 31, 2020 Level 1 Level 2 Level 3 Total Fixed maturities: U.S. government and government securities $ 17,471 $ — $ — $ 17,471 Foreign governments — 302 — 302 States, territories and possessions — 7,774 — 7,774 Political subdivisions of states, territories and possessions — 33,212 — 33,212 Special revenue and special assessment obligations — 81,714 — 81,714 Industrial and public utilities — 113,741 — 113,741 Commercial mortgage-backed securities — 18,066 — 18,066 Residential mortgage-backed securities — 93,017 — 93,017 Other loan-backed securities — 39,945 — 39,945 Hybrid securities — 362 — 362 Total fixed maturities 17,471 388,133 — 405,604 Equity securities: Preferred stock — 240 — 240 Common stock 958 576 2,000 3,534 Total equity securities 958 816 2,000 3,774 Total investments $ 18,429 $ 388,949 $ 2,000 $ 409,378 Funds held under reinsurance agreements $ — $ 174,704 $ — $ 174,704 Debt — 32,381 — 32,381 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Debt Securities, Available-for-sale | The cost or amortized cost, gross unrealized gains, gross unrealized losses, and estimated fair value of the Company's investments are as follows: March 31, 2021 Cost or Gross Gross Fair Value Fixed maturities: U.S. government and government securities $ 16,796 $ 243 $ (31) $ 17,008 Foreign governments 100 1 — 101 States, territories and possessions 8,273 163 (43) 8,393 Political subdivisions of states, territories and possessions 29,770 881 (200) 30,451 Special revenue and special assessment obligations 89,087 2,957 (869) 91,175 Industrial and public utilities 88,996 4,422 (129) 93,289 Commercial mortgage-backed securities 12,400 891 (35) 13,256 Residential mortgage-backed securities 88,020 1,154 (1,487) 87,687 Other loan-backed securities 35,873 570 (24) 36,419 Hybrid securities 356 3 (7) 352 Total fixed maturities available for sale 369,671 11,285 (2,825) 378,131 Equity securities: Preferred stock 243 1 (7) 237 Common stock 741 2,000 — 2,741 Total equity securities 984 2,001 (7) 2,978 Total investments $ 370,655 $ 13,286 $ (2,832) $ 381,109 December 31, 2020 Cost or Gross Gross Fair Value Fixed maturities: U.S. government and government securities $ 17,135 $ 336 $ — $ 17,471 Foreign governments 300 2 — 302 States, territories and possessions 7,500 274 — 7,774 Political subdivisions of states, territories and possessions 31,759 1,453 — 33,212 Special revenue and special assessment obligations 77,329 4,422 (37) 81,714 Industrial and public utilities 107,017 6,768 (44) 113,741 Commercial mortgage-backed securities 16,242 1,848 (24) 18,066 Residential mortgage-backed securities 91,478 1,626 (87) 93,017 Other loan-backed securities 39,293 719 (67) 39,945 Hybrid securities 356 6 — 362 Total fixed maturities available for sale 388,409 17,454 (259) 405,604 Equity securities: Preferred stock 243 — (3) 240 Common stock 1,554 2,053 (73) 3,534 Total equity securities 1,797 2,053 (76) 3,774 Total investments $ 390,206 $ 19,507 $ (335) $ 409,378 |
Schedule of Continuous Unrealized Loss Position | The following table illustrates the Company’s gross unrealized losses and fair value of fixed maturities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position: March 31, 2021 Less Than 12 Months 12 Months or More Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Fixed maturities: U.S. government and government securities $ 6,222 $ (31) $ — $ — $ 6,222 $ (31) Foreign governments — — — — — — States, territories and possessions 2,282 (43) — — 2,282 (43) Political subdivisions of states, territories and possessions 6,449 (200) — — 6,449 (200) Special revenue and special assessment obligations 28,661 (869) — — 28,661 (869) Industrial and public utilities 3,557 (116) 986 (13) 4,543 (129) Commercial mortgage-backed securities 8 — 987 (35) 995 (35) Residential mortgage-backed securities 56,009 (1,460) 755 (27) 56,764 (1,487) Other loan-backed securities 1,086 (7) 3,483 (17) 4,569 (24) Hybrid securities 243 (7) — — 243 (7) Total bonds $ 104,517 $ (2,733) $ 6,211 $ (92) $ 110,728 $ (2,825) December 31, 2020 Less Than 12 Months 12 Months or More Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Fixed maturities: U.S. government and government securities $ 4,518 $ — $ — $ — $ 4,518 $ — Foreign governments — — — — — — States, territories and possessions — — — — — — Political subdivisions of states, territories and possessions — — — — — — Special revenue and special assessment obligations 2,923 (37) — — 2,923 (37) Industrial and public utilities 2,106 (44) — — 2,106 (44) Commercial mortgage-backed securities 999 (24) — — 999 (24) Residential mortgage-backed securities 8,811 (74) 262 (13) 9,073 (87) Other loan-backed securities 2,037 (10) 9,036 (57) 11,073 (67) Hybrid securities 250 — — — 250 — Total bonds $ 21,644 $ (189) $ 9,298 $ (70) $ 30,942 $ (259) |
Summary of Investments by Contractual Maturity | The amortized cost and estimated fair value of fixed maturities as of March 31, 2021, by contractual maturity, are as follows: Cost or Amortized Cost Fair Value Available for sale: Due in one year or less $ 27,169 $ 27,512 Due after one year but before five years 81,928 85,473 Due after five years but before ten years 62,739 65,510 Due after ten years 61,542 62,274 Commercial mortgage-backed securities 12,400 13,256 Residential mortgage-backed securities 88,020 87,687 Other loan-backed securities 35,873 36,419 Total $ 369,671 $ 378,131 |
Sumnary of Realized Gain (Loss) on Investments | Realized gains and losses on investments included in the condensed consolidated statements of operations for the three months ended March 31, 2021 and 2020 are as follows: Three Months Ended March 31, 2021 2020 Fixed maturities: Gains $ 80 $ 119 Losses (67) — Total fixed maturities 13 119 Equity securities: Equity method investments: Gains — 3,115 Total equity securities — 3,115 Total net investment realized gains (losses) $ 13 $ 3,234 |
Summary of Net Investment Income | Net investment income consists of the following for the three months ended March 31, 2021 and 2020: Three Months Ended March 31, 2021 2020 Fixed maturities $ 1,560 $ 1,472 Preferred stock 30 (14) Common stock — 1,799 Interest earned on cash and short-term investments 2 15 Net investment income $ 1,592 $ 3,272 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consisted of the following: March 31, 2021 December 31, 2020 Secured credit facility $ 32,175 $ 32,381 Less: unamortized deferred financing costs (702) (744) Net debt $ 31,473 $ 31,637 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Disaggregation of Revenue | The following table presents the revenues recognized from contracts with customers included in the condensed consolidated statements of operations. Three Months Ended March 31, 2021 2020 Brokerage $ 3,455 $ 3,693 Managing general agent fees 289 154 Third-party administrator fees 378 384 Consulting and other fee-based revenue 533 161 Total revenue from contracts with customers $ 4,655 $ 4,392 |
Schedule of Contract with Customer, Contract Assets | The following table provides information related to the contract assets from contracts with customers. Contract assets are included within other assets on the condensed consolidated balance sheets. March 31, 2021 December 31, 2020 Contract assets $ 5,360 $ 3,405 |
Liability for Unpaid Losses a_2
Liability for Unpaid Losses and Loss Adjustment Expense (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Insurance [Abstract] | |
Schedule of Liability for Unpaid Losses and Loss Adjustment Expense | The following table represents a reconciliation of changes in the liability for unpaid losses and LAE. Three Months Ended March 31, 2021 2020 Unpaid losses and LAE reserves at beginning of period $ 457,817 $ 406,716 Less losses ceded through reinsurance (335,655) (304,005) Net unpaid losses and LAE at beginning of period 122,162 102,711 Incurred losses and LAE related to: Current period 24,907 14,169 Prior period (26) (1,235) Total incurred losses and LAE 24,881 12,934 Paid losses and LAE, net of reinsurance, related to: Current period 3,523 1,198 Prior period 11,146 7,795 Total paid losses and LAE 14,669 8,993 Net unpaid losses and LAE at end of period 132,374 106,652 Plus losses ceded through reinsurance 353,158 312,105 Unpaid losses and LAE reserves at end of period $ 485,532 $ 418,757 |
Reinsurance (Tables)
Reinsurance (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Reinsurance Disclosures [Abstract] | |
Summary of Effects of Reinsurance | A summary of the impact of ceded reinsurance on premiums written and premiums earned is as follows: Three Months Ended March 31, 2021 2020 Gross Assumed Ceded Net Gross Assumed Ceded Net Written premiums $ 144,898 $ 1,832 $ (89,484) $ 57,246 $ 105,977 $ 1,882 $ (81,632) $ 26,227 Earned premiums 126,404 1,895 (87,165) 41,134 98,543 1,943 (78,027) 22,459 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information | Supplemental balance sheet information, the weighted average remaining lease term and weighted average discount rate related to leases were as follows: March 31, 2021 December 31, 2020 Right of use asset $ 5,844 $ 6,338 Lease liability $ 6,372 $ 6,893 Weighted average remaining lease term 3.04 years 3.26 years Weighted average discount rate 6.37 % 6.37 % |
Schedule of Future Maturities of Lease Liabilities | Future maturities of lease liabilities as of March 31, 2021 are as follows: Operating Leases 2021 $ 1,833 2022 2,363 2023 1,781 2024 929 2025 94 Total lease payments 7,000 Less: imputed interest (628) Total lease liabilities $ 6,372 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the calculation of basic and diluted EPS of common stock: Three Months Ended March 31, 2021 2020 Net income - basic and diluted $ 6,791 $ 9,606 Weighted average number of shares outstanding - basic 51,148,782 37,386,394 Effect of dilutive securities: Restricted stock units 31,038 — Dilutive shares 31,038 — Weighted average number of shares outstanding - diluted 51,179,820 37,386,394 Earnings per share: Basic $ 0.13 $ 0.26 Diluted $ 0.13 $ 0.26 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income | The following table presents the changes in accumulated other comprehensive income for unrealized gains and losses on available-for-sale securities: Three Months Ended March 31, 2021 2020 Balance at beginning of period $ 9,527 $ 4,821 Other comprehensive loss, net of tax: Unrealized investment loss: Unrealized investment gains arising during the period (5,220) (1,223) Income tax benefit (1,096) (256) Unrealized investment loss, net of tax (4,124) (967) Less: reclassification adjustments to: Net realized investment gains included in net realized capital gains 13 119 Income tax expense 3 26 Total reclassifications included in net income, net of tax 10 93 Other comprehensive loss (4,134) (1,060) Balance at end of period $ 5,393 $ 3,761 |
Stock Compensation (Tables)
Stock Compensation (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | Fiscal 2021 Expected volatility 29.8% Expected term 6 years Risk-free interest rate 1.32% |
Summary of Stock Option Activity | A summary of the status of the Company's stock option activity as of March 31, 2021 and changes during the three months then ended are as follows: Stock Options Weighted Average Exercise Price Balance outstanding, December 31, 2020 89,920 $ 15.00 Granted 60,729 $ 17.50 Balance outstanding, March 31, 2021 150,649 $ 16.01 Options exercisable, March 31, 2021 — $ — |
Summary of Options, Vested and Expected to Vest, Outstanding | The following table summarizes information regarding stock options outstanding as of March 31, 2021: Options Outstanding Options Vested or Expected to Vest Stock Options Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term Aggregate Intrinsic Value Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term Aggregate Intrinsic Value 2020 Omnibus Plan 150,649 $ 16.01 9.57 years $ 103 150,649 $ 16.01 9.57 years $ 103 |
Schedule of Share-based Payment Award, Restricted Stock Units, Valuation Assumptions | Grant date fair values were determined using a Monte Carlo valuation model based on the following assumptions: Fiscal 2021 Total grant date fair value $ 845 Total grant date fair value per share $ 13.92 Expected volatility 35.0 % Weighted average expected life 2.77 years Risk-free interest rate 0.27 % |
Summary of Share-based Payment Award, Total Shareholder Return | The percent of the target MSU that will be earned based on the Company’s TSR is as follows: Cumulative TSR % Percent of Units Vested Below 25.1% 0% 25.1% 50% 47.2% 100% 69.3% and above 200% |
Summary of Nonvested Restricted Stock Unit Activity | A summary of the status of the Company’s non-vested restricted stock unit activity as of March 31, 2021 and changes during the three-month period then ended is as follows: Shares Weighted Average Grant Date Fair Value Non-vested outstanding, December 31, 2020 111,588 $ 14.99 Granted 242,902 $ 16.61 Non-vested outstanding, March 31, 2021 354,490 $ 16.10 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 01, 2020 | Jul. 15, 2020 | Apr. 01, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | Jul. 14, 2020 |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 140,640 | $ 140,640 | ||||
Intangible assets | 73,903 | 75,316 | ||||
Equity method investments | $ 0 | $ 232 | ||||
7710 Insurance Company | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of voting interests acquired | 100.00% | |||||
Consideration transferred | $ 12,140 | |||||
Goodwill | 2,873 | |||||
Intangible assets | $ 3,299 | |||||
Compstar Holding Company LLC | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of voting interests acquired | 55.00% | |||||
Consideration transferred | $ 99,204 | |||||
Goodwill | 134,428 | |||||
Intangible assets | 73,954 | |||||
Ownership percentage | 45.00% | |||||
Fair value amount of equity method investment | 81,167 | |||||
Equity method investments | 11,321 | |||||
Gain (loss) on equity method investments | $ 69,846 | |||||
Compstar Holding Company LLC | Common stock | ||||||
Business Acquisition [Line Items] | ||||||
Stock issued during period (in shares) | 6,613,606 | 6,613,606 | ||||
Stock issued, price per share | $ 15 | |||||
LCTA Risk Services, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of voting interests acquired | 100.00% | |||||
Consideration transferred | $ 1,400 | |||||
Goodwill | $ 517 |
Acquisitions - Schedule of Asse
Acquisitions - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Oct. 01, 2020 | Jul. 15, 2020 | Apr. 01, 2020 | Mar. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 140,640 | $ 140,640 | |||
Compstar Holding Company LLC | |||||
Business Acquisition [Line Items] | |||||
Fair value of total consideration transferred | $ 99,204 | ||||
Previous investment in subsidiary | 11,321 | ||||
Fair value adjustment to prior investment | 69,846 | ||||
Cash and cash equivalents | 11,891 | ||||
Premiums and other receivables | 3,632 | ||||
Property and equipment | 444 | ||||
Right of use asset | 1,020 | ||||
Goodwill | 134,428 | ||||
Intangible assets, net | 73,954 | ||||
Other assets | 184 | ||||
Accounts payable and accrued expenses | (11,328) | ||||
Lease liability | (1,302) | ||||
Deferred tax liabilities | (12,487) | ||||
Debt | (20,065) | ||||
Net assets acquired | $ 180,371 | ||||
LCTA Risk Services, Inc. | |||||
Business Acquisition [Line Items] | |||||
Fair value of total consideration transferred | $ 1,400 | ||||
Cash and cash equivalents | 302 | ||||
Premiums and other receivables | 55 | ||||
Property and equipment | 63 | ||||
Goodwill | 517 | ||||
Intangible assets, net | 482 | ||||
Other assets | 12 | ||||
Accounts payable | (17) | ||||
Income taxes payable | (14) | ||||
Net assets acquired | $ 1,400 | ||||
7710 Insurance Company | |||||
Business Acquisition [Line Items] | |||||
Fair value of total consideration transferred | $ 12,140 | ||||
Fixed maturities | 895 | ||||
Cash and cash equivalents | 2,704 | ||||
Accrued investment income | 7 | ||||
Premiums and other receivables | 2,618 | ||||
Reinsurance recoverable | 5,069 | ||||
Prepaid reinsurance premiums | 920 | ||||
Deferred policy acquisition costs | 466 | ||||
Property and equipment | 22 | ||||
Right of use asset | 196 | ||||
Goodwill | 2,873 | ||||
Intangible assets, net | 3,299 | ||||
Other assets | 7,435 | ||||
Unpaid loss and loss adjustment expenses | (8,117) | ||||
Unearned premiums | (3,831) | ||||
Funds held under reinsurance agreements | (421) | ||||
Accounts payable and accrued expenses | (1,112) | ||||
Lease liability | (220) | ||||
Deferred tax liabilities | (394) | ||||
Debt | (269) | ||||
Net assets acquired | $ 12,140 |
Acquisitions - Schedule of Acqu
Acquisitions - Schedule of Acquired Finite-Lived Intangible Assets by Major Class (Details) - USD ($) $ in Thousands | Oct. 01, 2020 | Jul. 15, 2020 | Mar. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets, net | $ 73,903 | $ 75,316 | ||
7710 Insurance Company | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets, net | $ 3,299 | |||
7710 Insurance Company | Trade Names | ||||
Business Acquisition [Line Items] | ||||
Useful life | 15 years | |||
Finite-lived intangible assets, net | $ 458 | |||
7710 Insurance Company | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Useful life | 10 years | |||
Finite-lived intangible assets, net | $ 2,841 | |||
Compstar Holding Company LLC | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets, net | $ 73,954 | |||
Compstar Holding Company LLC | Trade Names | ||||
Business Acquisition [Line Items] | ||||
Useful life | 15 years | |||
Finite-lived intangible assets, net | $ 3,157 | |||
Compstar Holding Company LLC | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Useful life | 14 years | |||
Finite-lived intangible assets, net | $ 70,797 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 378,131 | $ 405,604 |
Equity securities: | 2,978 | 3,774 |
Total investments | 381,109 | 409,610 |
Funds held under reinsurance agreements | 151,268 | 174,704 |
Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | 32,175 | 32,381 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 16,833 | 17,471 |
Equity securities: | 0 | 958 |
Funds held under reinsurance agreements | 0 | 0 |
Level 1 | Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 361,298 | 388,133 |
Equity securities: | 978 | 816 |
Funds held under reinsurance agreements | 151,268 | 174,704 |
Level 2 | Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | 32,175 | 32,381 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Equity securities: | 2,000 | 2,000 |
Funds held under reinsurance agreements | 0 | 0 |
Level 3 | Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | 0 | 0 |
U.S. government and government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 17,008 | 17,471 |
U.S. government and government securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 16,833 | 17,471 |
U.S. government and government securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 175 | 0 |
U.S. government and government securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Foreign governments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 101 | 302 |
Foreign governments | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Foreign governments | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 101 | 302 |
Foreign governments | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
States, territories and possessions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 8,393 | 7,774 |
States, territories and possessions | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
States, territories and possessions | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 8,393 | 7,774 |
States, territories and possessions | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Political subdivisions of states, territories and possessions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 30,451 | 33,212 |
Political subdivisions of states, territories and possessions | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Political subdivisions of states, territories and possessions | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 30,451 | 33,212 |
Political subdivisions of states, territories and possessions | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Special revenue and special assessment obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 91,175 | 81,714 |
Special revenue and special assessment obligations | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Special revenue and special assessment obligations | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 91,175 | 81,714 |
Special revenue and special assessment obligations | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Industrial and public utilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 93,289 | 113,741 |
Industrial and public utilities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Industrial and public utilities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 93,289 | 113,741 |
Industrial and public utilities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 13,256 | 18,066 |
Commercial mortgage-backed securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Commercial mortgage-backed securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 13,256 | 18,066 |
Commercial mortgage-backed securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 87,687 | 93,017 |
Residential mortgage-backed securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Residential mortgage-backed securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 87,687 | 93,017 |
Residential mortgage-backed securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Other loan-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 36,419 | 39,945 |
Other loan-backed securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Other loan-backed securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 36,419 | 39,945 |
Other loan-backed securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Hybrid securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 352 | 362 |
Hybrid securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Hybrid securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 352 | 362 |
Hybrid securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Preferred stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities: | 237 | 240 |
Preferred stock | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities: | 0 | 0 |
Preferred stock | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities: | 237 | 240 |
Preferred stock | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities: | 0 | 0 |
Common stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities: | 2,741 | 3,534 |
Common stock | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities: | 0 | 958 |
Common stock | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities: | 741 | 576 |
Common stock | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities: | 2,000 | 2,000 |
Available-For-Sale and Equity Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 381,109 | 409,378 |
Available-For-Sale and Equity Securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 16,833 | 18,429 |
Available-For-Sale and Equity Securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 362,276 | 388,949 |
Available-For-Sale and Equity Securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | $ 2,000 | $ 2,000 |
Investments - Schedule of Debt
Investments - Schedule of Debt Securities, Available-for-sale (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Fixed maturities: | ||
Cost or Amortized Cost | $ 369,671 | $ 388,409 |
Gross Unrealized Gains | 11,285 | 17,454 |
Gross Unrealized Losses | (2,825) | (259) |
Fair Value | 378,131 | 405,604 |
Equity securities: | ||
Cost or Amortized Cost | 984 | 1,797 |
Gross Unrealized Gains | 2,001 | 2,053 |
Gross Unrealized Losses | (7) | (76) |
Fair Value | 2,978 | 3,774 |
Cost or Amortized Cost | 370,655 | 390,206 |
Gross Unrealized Gains | 13,286 | 19,507 |
Gross Unrealized Losses | (2,832) | (335) |
Fair Value | 381,109 | 409,378 |
U.S. government and government securities | ||
Fixed maturities: | ||
Cost or Amortized Cost | 16,796 | 17,135 |
Gross Unrealized Gains | 243 | 336 |
Gross Unrealized Losses | (31) | 0 |
Fair Value | 17,008 | 17,471 |
Foreign governments | ||
Fixed maturities: | ||
Cost or Amortized Cost | 100 | 300 |
Gross Unrealized Gains | 1 | 2 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 101 | 302 |
States, territories and possessions | ||
Fixed maturities: | ||
Cost or Amortized Cost | 8,273 | 7,500 |
Gross Unrealized Gains | 163 | 274 |
Gross Unrealized Losses | (43) | 0 |
Fair Value | 8,393 | 7,774 |
Political subdivisions of states, territories and possessions | ||
Fixed maturities: | ||
Cost or Amortized Cost | 29,770 | 31,759 |
Gross Unrealized Gains | 881 | 1,453 |
Gross Unrealized Losses | (200) | 0 |
Fair Value | 30,451 | 33,212 |
Special revenue and special assessment obligations | ||
Fixed maturities: | ||
Cost or Amortized Cost | 89,087 | 77,329 |
Gross Unrealized Gains | 2,957 | 4,422 |
Gross Unrealized Losses | (869) | (37) |
Fair Value | 91,175 | 81,714 |
Industrial and public utilities | ||
Fixed maturities: | ||
Cost or Amortized Cost | 88,996 | 107,017 |
Gross Unrealized Gains | 4,422 | 6,768 |
Gross Unrealized Losses | (129) | (44) |
Fair Value | 93,289 | 113,741 |
Commercial mortgage-backed securities | ||
Fixed maturities: | ||
Cost or Amortized Cost | 12,400 | 16,242 |
Gross Unrealized Gains | 891 | 1,848 |
Gross Unrealized Losses | (35) | (24) |
Fair Value | 13,256 | 18,066 |
Residential mortgage-backed securities | ||
Fixed maturities: | ||
Cost or Amortized Cost | 88,020 | 91,478 |
Gross Unrealized Gains | 1,154 | 1,626 |
Gross Unrealized Losses | (1,487) | (87) |
Fair Value | 87,687 | 93,017 |
Other loan-backed securities | ||
Fixed maturities: | ||
Cost or Amortized Cost | 35,873 | 39,293 |
Gross Unrealized Gains | 570 | 719 |
Gross Unrealized Losses | (24) | (67) |
Fair Value | 36,419 | 39,945 |
Hybrid securities | ||
Fixed maturities: | ||
Cost or Amortized Cost | 356 | 356 |
Gross Unrealized Gains | 3 | 6 |
Gross Unrealized Losses | (7) | 0 |
Fair Value | 352 | 362 |
Preferred stock | ||
Equity securities: | ||
Cost or Amortized Cost | 243 | 243 |
Gross Unrealized Gains | 1 | 0 |
Gross Unrealized Losses | (7) | (3) |
Fair Value | 237 | 240 |
Common stock | ||
Equity securities: | ||
Cost or Amortized Cost | 741 | 1,554 |
Gross Unrealized Gains | 2,000 | 2,053 |
Gross Unrealized Losses | 0 | (73) |
Fair Value | $ 2,741 | $ 3,534 |
Investments - Schedule of Conti
Investments - Schedule of Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Fair Value, less than 12 months | $ 104,517 | $ 21,644 |
Unrealized Loss, less than 12 months | (2,733) | (189) |
Fair Value, 12 months or more | 6,211 | 9,298 |
Unrealized Loss, 12 months or more | (92) | (70) |
Fair Value | 110,728 | 30,942 |
Unrealized Loss | (2,825) | (259) |
U.S. government and government securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Fair Value, less than 12 months | 6,222 | 4,518 |
Unrealized Loss, less than 12 months | (31) | 0 |
Fair Value, 12 months or more | 0 | 0 |
Unrealized Loss, 12 months or more | 0 | 0 |
Fair Value | 6,222 | 4,518 |
Unrealized Loss | (31) | 0 |
Foreign governments | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Fair Value, less than 12 months | 0 | 0 |
Unrealized Loss, less than 12 months | 0 | 0 |
Fair Value, 12 months or more | 0 | 0 |
Unrealized Loss, 12 months or more | 0 | 0 |
Fair Value | 0 | 0 |
Unrealized Loss | 0 | 0 |
States, territories and possessions | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Fair Value, less than 12 months | 2,282 | 0 |
Unrealized Loss, less than 12 months | (43) | 0 |
Fair Value, 12 months or more | 0 | 0 |
Unrealized Loss, 12 months or more | 0 | 0 |
Fair Value | 2,282 | 0 |
Unrealized Loss | (43) | 0 |
Political subdivisions of states, territories and possessions | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Fair Value, less than 12 months | 6,449 | 0 |
Unrealized Loss, less than 12 months | (200) | 0 |
Fair Value, 12 months or more | 0 | 0 |
Unrealized Loss, 12 months or more | 0 | 0 |
Fair Value | 6,449 | 0 |
Unrealized Loss | (200) | 0 |
Special revenue and special assessment obligations | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Fair Value, less than 12 months | 28,661 | 2,923 |
Unrealized Loss, less than 12 months | (869) | (37) |
Fair Value, 12 months or more | 0 | 0 |
Unrealized Loss, 12 months or more | 0 | 0 |
Fair Value | 28,661 | 2,923 |
Unrealized Loss | (869) | (37) |
Industrial and public utilities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Fair Value, less than 12 months | 3,557 | 2,106 |
Unrealized Loss, less than 12 months | (116) | (44) |
Fair Value, 12 months or more | 986 | 0 |
Unrealized Loss, 12 months or more | (13) | 0 |
Fair Value | 4,543 | 2,106 |
Unrealized Loss | (129) | (44) |
Commercial mortgage-backed securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Fair Value, less than 12 months | 8 | 999 |
Unrealized Loss, less than 12 months | 0 | (24) |
Fair Value, 12 months or more | 987 | 0 |
Unrealized Loss, 12 months or more | (35) | 0 |
Fair Value | 995 | 999 |
Unrealized Loss | (35) | (24) |
Residential mortgage-backed securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Fair Value, less than 12 months | 56,009 | 8,811 |
Unrealized Loss, less than 12 months | (1,460) | (74) |
Fair Value, 12 months or more | 755 | 262 |
Unrealized Loss, 12 months or more | (27) | (13) |
Fair Value | 56,764 | 9,073 |
Unrealized Loss | (1,487) | (87) |
Other loan-backed securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Fair Value, less than 12 months | 1,086 | 2,037 |
Unrealized Loss, less than 12 months | (7) | (10) |
Fair Value, 12 months or more | 3,483 | 9,036 |
Unrealized Loss, 12 months or more | (17) | (57) |
Fair Value | 4,569 | 11,073 |
Unrealized Loss | (24) | (67) |
Hybrid securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Fair Value, less than 12 months | 243 | 250 |
Unrealized Loss, less than 12 months | (7) | 0 |
Fair Value, 12 months or more | 0 | 0 |
Unrealized Loss, 12 months or more | 0 | 0 |
Fair Value | 243 | 250 |
Unrealized Loss | $ (7) | $ 0 |
Investments - Summary of Invest
Investments - Summary of Investments by Contractual Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Cost or Amortized Cost | ||
Due in one year or less | $ 27,169 | |
Due after one year but before five years | 81,928 | |
Due after five years but before ten years | 62,739 | |
Due after ten years | 61,542 | |
Cost or Amortized Cost | 369,671 | $ 388,409 |
Fair Value | ||
Due in one year or less | 27,512 | |
Due after one year but before five years | 85,473 | |
Due after five years but before ten years | 65,510 | |
Due after ten years | 62,274 | |
Fair Value | 378,131 | 405,604 |
Commercial mortgage-backed securities | ||
Cost or Amortized Cost | ||
Cost or Amortized Cost | 12,400 | 16,242 |
Fair Value | ||
Fair Value | 13,256 | 18,066 |
Residential mortgage-backed securities | ||
Cost or Amortized Cost | ||
Cost or Amortized Cost | 88,020 | 91,478 |
Fair Value | ||
Fair Value | 87,687 | 93,017 |
Other loan-backed securities | ||
Cost or Amortized Cost | ||
Cost or Amortized Cost | 35,873 | 39,293 |
Fair Value | ||
Fair Value | $ 36,419 | $ 39,945 |
Investments - Sumnary of Realiz
Investments - Sumnary of Realized Gain (Loss) on Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Debt Securities, Available-for-sale, Realized Gain (Loss) [Abstract] | ||
Gains | $ 80 | $ 119 |
Losses | (67) | 0 |
Total fixed maturities | 13 | 119 |
Equity Securities, FV-NI, Realized Gain (Loss) [Abstract] | ||
Gains | 0 | 3,115 |
Total equity securities | 0 | 3,115 |
Total net investment realized gains (losses) | $ 13 | $ 3,234 |
Investments - Summary of Net In
Investments - Summary of Net Investment Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Net Investment Income [Line Items] | ||
Net investment income | $ 1,592 | $ 3,272 |
Fixed maturities | ||
Net Investment Income [Line Items] | ||
Net investment income | 1,560 | 1,472 |
Preferred stock | ||
Net Investment Income [Line Items] | ||
Net investment income | 30 | (14) |
Common stock | ||
Net Investment Income [Line Items] | ||
Net investment income | 0 | 1,799 |
Interest earned on cash and short-term investments | ||
Net Investment Income [Line Items] | ||
Net investment income | $ 2 | $ 15 |
Equity Method Investments (Deta
Equity Method Investments (Details) - USD ($) $ in Thousands | Jan. 03, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Jul. 15, 2020 | Jul. 14, 2020 | Jan. 02, 2020 |
Schedule of Equity Method Investments [Line Items] | ||||||
Income from equity method investments | $ 0 | $ 702 | ||||
Distributions from equity method investments | 0 | (1,389) | ||||
Proceeds from sale of equity method investment | 232 | 3,000 | ||||
Unrealized gain on sale of equity method investment | $ 1,592 | 3,272 | ||||
Compstar Holding Company LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Percentage of voting interests acquired | 55.00% | |||||
Ownership percentage | 45.00% | |||||
Compstar Holding Company LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Income from equity method investments | 702 | |||||
Distributions from equity method investments | (1,278) | |||||
Ownership percentage | 45.00% | |||||
Trean Intermediaries | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Distributions from equity method investments | (225) | |||||
Ownership percentage sold | 15.00% | |||||
Ownership percentage | 25.00% | |||||
Proceeds from sale of equity method investment | $ 3,000 | |||||
Cumulative percentage ownership after all transactions | 10.00% | |||||
Realized gain (loss) on sale | $ 3 | |||||
Unrealized gain on sale of equity method investment | $ 2,000 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Less: unamortized deferred financing costs | $ (702) | $ (744) |
Net debt | 31,473 | 31,637 |
Secured credit facility | ||
Debt Instrument [Line Items] | ||
Secured credit facility | $ 32,175 | $ 32,381 |
Debt - Narrative (Details)
Debt - Narrative (Details) - Secured credit facility - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | May 26, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Apr. 03, 2018 |
Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 27,500,000 | |||||
Amended and Restated Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 33,000,000 | |||||
Extension term | 5 years | |||||
Increase (decrease) to term loan debt amount | $ 11,707,000 | |||||
Amended and Restated Credit Agreement | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Quarterly installment payments | $ 206,000 | |||||
Amended and Restated Credit Agreement | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Quarterly installment payments | 825,000 | |||||
Amended and Restated Credit Agreement | London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 4.75% | 4.72% | 4.50% | |||
Debt | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 3,000,000 | |||||
Debt interest expense | $ 385,000 | $ 334,000 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | ||
Revenues | $ 4,655 | $ 4,392 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Summary of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts with customers | $ 4,655 | $ 4,392 |
Brokerage | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts with customers | 3,455 | 3,693 |
Managing general agent fees | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts with customers | 289 | 154 |
Third-party administrator fees | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts with customers | 378 | 384 |
Consulting and other fee-based revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts with customers | $ 533 | $ 161 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Schedule of Contract with Customer, Contract Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 5,360 | $ 3,405 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Jul. 14, 2020 | |
Income Tax Examination [Line Items] | |||
Effective income tax rate, percent | 21.90% | 24.60% | |
Compstar Holding Company LLC | |||
Income Tax Examination [Line Items] | |||
Ownership percentage | 45.00% |
Liability for Unpaid Losses a_3
Liability for Unpaid Losses and Loss Adjustment Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |||||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||||||
Unpaid losses and LAE reserves at beginning of period | $ 457,817 | $ 406,716 | ||||
Less losses ceded through reinsurance | (335,655) | (304,005) | ||||
Net unpaid losses and LAE at beginning of period | 132,374 | 106,652 | $ 132,374 | $ 122,162 | $ 106,652 | $ 102,711 |
Incurred losses and LAE related to: | ||||||
Current period | 24,907 | 14,169 | ||||
Prior period | (26) | (1,235) | ||||
Total incurred losses and LAE | 24,881 | 12,934 | ||||
Paid losses and LAE, net of reinsurance, related to: | ||||||
Current period | 3,523 | 1,198 | ||||
Prior period | 11,146 | 7,795 | ||||
Total paid losses and LAE | 14,669 | 8,993 | ||||
Net unpaid losses and LAE at end of period | 132,374 | 106,652 | ||||
Plus losses ceded through reinsurance | 335,655 | 304,005 | $ 353,158 | $ 335,655 | $ 312,105 | $ 304,005 |
Unpaid losses and LAE reserves at end of period | $ 485,532 | $ 418,757 |
Reinsurance (Details)
Reinsurance (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Written premiums | ||
Gross | $ 144,898 | $ 105,977 |
Assumed | 1,832 | 1,882 |
Ceded | (89,484) | (81,632) |
Net written premiums | 57,246 | 26,227 |
Earned premiums | ||
Gross | 126,404 | 98,543 |
Assumed | 1,895 | 1,943 |
Ceded | (87,165) | (78,027) |
Net earned premiums | $ 41,134 | $ 22,459 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Lessee, Lease, Description [Line Items] | ||
Renewal term | 5 years | |
Lease expense | $ 674 | $ 579 |
Variable lease expense | 75 | 120 |
Sublease income | $ 18 | $ 12 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Term of contract | 1 month | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Term of contract | 51 months |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Right of use asset | $ 5,844 | $ 6,338 |
Lease liability | $ 6,372 | $ 6,893 |
Weighted average remaining lease term | 3 years 14 days | 3 years 3 months 3 days |
Weighted average discount rate | 6.37% | 6.37% |
Leases - Schedule of Future Mat
Leases - Schedule of Future Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
2021 | $ 1,833 | |
2022 | 2,363 | |
2023 | 1,781 | |
2024 | 929 | |
2025 | 94 | |
Total lease payments | 7,000 | |
Less: imputed interest | (628) | |
Total lease liabilities | $ 6,372 | $ 6,893 |
Equity - Narrative (Details)
Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 22, 2020 | Jul. 20, 2020 | Jul. 15, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Class of Stock [Line Items] | |||||||
Proceeds from Issuance Initial Public Offering | $ 93,139 | ||||||
Payments for underwriting discounts and commissions | 7,500 | ||||||
Payments of offering expenses | $ 6,503 | ||||||
Common stock, authorized (in shares) | 600,000,000 | 600,000,000 | |||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||||
Common stock, issued (in shares) | 51,148,782 | 51,148,782 | |||||
Common stock, outstanding (in shares) | 51,148,782 | 51,148,782 | |||||
Initial Public Offering | |||||||
Class of Stock [Line Items] | |||||||
Sale of stock, number of shares issued in transaction | 10,714,286 | ||||||
Sale of stock, price per share (in dollars per share) | $ 15 | ||||||
IPO - Shares Issued and Sold By Trean Corporation | |||||||
Class of Stock [Line Items] | |||||||
Sale of stock, number of shares issued in transaction | 7,142,857 | ||||||
Consideration received on IPO | $ 107,142 | ||||||
IPO - Shares Sold by Selling Stockholders | |||||||
Class of Stock [Line Items] | |||||||
Sale of stock, number of shares issued in transaction | 1,207,142 | 3,571,429 | |||||
Consideration received on IPO | $ 71,678 | ||||||
Compstar Holding Company LLC | |||||||
Class of Stock [Line Items] | |||||||
Consideration transferred | $ 99,204 | ||||||
Percentage of voting interests acquired | 55.00% | ||||||
Common stock | |||||||
Class of Stock [Line Items] | |||||||
Common stock, outstanding (in shares) | 51,148,782 | 51,148,782 | 0 | 0 | |||
Corporate recapitalization shares exchanged | 37,386,394 | ||||||
Common stock | Compstar Holding Company LLC | |||||||
Class of Stock [Line Items] | |||||||
Stock issued during period (in shares) | 6,613,606 | 6,613,606 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Net income | $ 6,791 | $ 9,606 |
Weighted average number of shares outstanding - basic | ||
Weighted average number of shares outstanding - basic (in shares) | 51,148,782 | 37,386,394 |
Effect of dilutive securities: | ||
Dilutive securities (in shares) | 31,038 | 0 |
Weighted average number of shares outstanding - diluted | ||
Weighted average number of shares outstanding - diluted (in shares) | 51,179,820 | 37,386,394 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.13 | $ 0.26 |
Diluted (in dollars per share) | $ 0.13 | $ 0.26 |
Antidilutive securities excluded from computation of earnings per share | 60,729 | |
Antidilutive securities excluded from computation of earnings per share, exercise price (in dollars per share) | $ 17.50 | |
Restricted Stock Units (RSUs) | ||
Effect of dilutive securities: | ||
Dilutive securities (in shares) | 31,038 | 0 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Shareholders' equity beginning balance | $ 410,107 | |
Less reclassification adjustments to: | ||
Other comprehensive loss | (4,134) | $ (1,060) |
Shareholders' equity ending balance | 412,975 | |
Accumulated Other Comprehensive Income | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Shareholders' equity beginning balance | 9,527 | 4,821 |
Less reclassification adjustments to: | ||
Other comprehensive loss | (4,134) | (1,060) |
Shareholders' equity ending balance | 5,393 | 3,761 |
AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-sale, Parent | ||
Unrealized investment losses: | ||
Unrealized investment gains arising during the period | (5,220) | (1,223) |
Income tax benefit | (1,096) | (256) |
Unrealized investment loss, net of tax | (4,124) | (967) |
Less reclassification adjustments to: | ||
Net realized investment gains included in net realized capital gains | 13 | 119 |
Income tax expense | 3 | 26 |
Total reclassifications included in net income, net of tax | 10 | 93 |
Other comprehensive loss | $ (4,134) | $ (1,060) |
Stock Compensation - Narrative
Stock Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 31, 2021 | Mar. 31, 2021 | Mar. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock compensation expense | $ 211 | $ 0 | |
Non-vested non-option stock-based compensation expense | $ 5,259 | $ 5,259 | |
2020 Omnibus Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares authorized | 5,058,085 | 5,058,085 | |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock compensation expense | $ 35 | ||
Weighted average grant-date fair value of options granted (in dollars per share) | $ 5.49 | ||
Unrecognized compensation cost related to stock options | $ 636 | $ 636 | |
Cost not yet recognized, weighted average period for recognition | 9 years 6 months 25 days | 1 year 6 months | |
Stock Options | Share-based Payment Arrangement, Employee | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Annual vesting percentage | 33.00% | ||
Vesting period (in years) | 3 years | ||
Contractual term from date of grant (in years) | 10 years | ||
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock compensation expense | $ 176 | ||
Vesting period (in years) | 3 years | ||
Cost not yet recognized, weighted average period for recognition | 2 years 9 months 18 days | ||
Time-Based Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 12 months | ||
Market-Based Stock Units (MSUs) | 25.1% | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Annual vesting percentage | 50.00% | ||
Market-Based Stock Units (MSUs) | 69.4% and Above | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Annual vesting percentage | 200.00% | ||
Performance Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 3 years | ||
Performance Stock Units | 25.1% | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Payout rate (percentage) | 50.00% | 50.00% | |
Performance Stock Units | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Payout rate (percentage) | 0.00% | 0.00% | |
Performance Stock Units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Payout rate (percentage) | 200.00% | 200.00% | |
Performance Stock Units | Maximum | 69.4% and Above | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Payout rate (percentage) | 200.00% | 200.00% |
Stock Compensation - Schedule o
Stock Compensation - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Expected volatility | 29.80% |
Expected term | 6 years |
Risk-free interest rate | 1.32% |
Stock Compensation - Summary of
Stock Compensation - Summary of Stock Option Activity (Details) - Stock Options | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Stock Options | |
Options outstanding, beginning balance (in shares) | shares | 89,920 |
Granted (in shares) | shares | 60,729 |
Options outstanding, ending balance (in shares) | shares | 150,649 |
Options exercisable (in shares) | shares | 0 |
Weighted Average Exercise Price | |
Options outstanding, weighted average exercise price, beginning balance (in dollars per share) | $ / shares | $ 15 |
Grants in period, weighted average exercise price (in dollars per share) | $ / shares | 17.50 |
Options outstanding, weighted average exercise price, ending balance (in dollars per share) | $ / shares | 16.01 |
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares | $ 0 |
Stock Compensation - Summary _2
Stock Compensation - Summary of Options, Vested and Expected to Vest, Outstanding (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Options Vested or Expected to Vest | |||
Number of Shares | 150,649 | 150,649 | |
Weighted Average Exercise Price (in dollars per share) | $ 16.01 | $ 16.01 | |
Weighted Average Remaining Contract Term | 9 years 6 months 25 days | ||
Aggregate Intrinsic Value | $ 103 | $ 103 | |
Stock Options | |||
Options Outstanding | |||
Number of Shares | 150,649 | 150,649 | 89,920 |
Weighted Average Exercise Price (in dollars per share) | $ 16.01 | $ 16.01 | $ 15 |
Weighted Average Remaining Contract Term | 9 years 6 months 25 days | 1 year 6 months | |
Aggregate Intrinsic Value | $ 103 | $ 103 |
Stock Compensation - Schedule_2
Stock Compensation - Schedule of Share-based Payment Award, Restricted Stock Units, Valuation Assumptions (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($)$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 29.80% |
Expected term | 6 years |
Risk-free interest rate | 1.32% |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total grant date fair value | $ | $ 845 |
Total grant date fair value per share (in dollars per share) | $ / shares | $ 13.92 |
Expected volatility | 35.00% |
Expected term | 2 years 9 months 7 days |
Risk-free interest rate | 0.27% |
Stock Compensation - Summary _3
Stock Compensation - Summary of Share-based Payment Award, Total Shareholder Return (Details) - Market-Based Stock Units (MSUs) | 3 Months Ended |
Mar. 31, 2021 | |
Below 25.1% | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Annual vesting percentage | 0.00% |
Cumulative TSR % | 25.10% |
25.1% | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Annual vesting percentage | 50.00% |
Cumulative TSR % | 25.10% |
47.2% | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Annual vesting percentage | 100.00% |
Cumulative TSR % | 47.20% |
69.4% and Above | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Annual vesting percentage | 200.00% |
Cumulative TSR % | 69.30% |
Stock Compensation - Summary _4
Stock Compensation - Summary of Nonvested Restricted Stock Unit Activity (Details) | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Non-vested outstanding, beginning balance (in shares) | shares | 111,588 |
Granted (in shares) | shares | 242,902 |
Non-vested outstanding, ending balance (in shares) | shares | 354,490 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Non-vested outstanding, weighted average grant date fair value, beginning balance (in dollars per share) | $ / shares | $ 14.99 |
Grants in period, weighted average exercise price (in dollars per share) | $ / shares | 16.61 |
Non-vested outstanding, weighted average grant date fair value, ending balance (in dollars per share) | $ / shares | $ 16.10 |
Transactions with Related Par_2
Transactions with Related Parties (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Jul. 14, 2020 | Jan. 02, 2020 | |
Related Party Transaction [Line Items] | ||||
Gross earned premiums | $ 128,299 | $ 100,486 | ||
Trean Intermediaries | ||||
Related Party Transaction [Line Items] | ||||
Ownership percentage | 25.00% | |||
Trean Intermediaries | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related parties | 50 | |||
Compstar Holding Company LLC | ||||
Related Party Transaction [Line Items] | ||||
Ownership percentage | 45.00% | |||
Compstar Holding Company LLC | Affiliated Entity | Program Manager Agreement | ||||
Related Party Transaction [Line Items] | ||||
Gross earned premiums | 46,282 | |||
Gross commissions | $ 9,972 |