2 unchanged sentences
losses due to adverse changes in the fair value of financial instruments.
−Removed: The Company has exposure to three principal types of market
−Removed: risk through its investment activities:
+Added: We have exposure to three principal types of market risk through
+Added: our investment activities:
interest rate risk, credit risk, and equity risk.
−Removed: Our primary market risk exposure is to changes
−Removed: in interest rates.
−Removed: We have not entered, and do not plan to enter, into any derivative financial instruments for hedging, trading, or speculative
+Added: Our primary market risk exposure is to changes in interest
+Added: We have not entered, and do not plan to enter, into any derivative financial instruments for hedging, trading, or speculative purposes.
Interest Rate Risk
−Removed: Interest rate risk is the risk that a company
−Removed: will incur economic losses due to adverse changes in interest rates.
−Removed: Our exposure to interest rate changes primarily results from our
−Removed: significant holdings of fixed income securities.
+Added: Interest rate risk is the risk that a company will
+Added: incur economic losses due to adverse changes in interest rates.
+Added: Our exposure to interest rate changes primarily results from our significant
+Added: holdings of fixed income securities.
Fluctuations in interest rates have a direct impact on the fair value of these securities.
−Removed: We develop our investment strategies based on
−Removed: a number of factors, including estimated duration of reserve liabilities, short and long-term liquidity needs, general economic conditions,
−Removed: expected rates of inflation and regulatory requirements.
−Removed: The portfolio duration of the fixed income securities in the Company’s
−Removed: investment portfolio at December 31, 2022 was 4.55 years.
+Added: We develop our investment strategies based on a number
+Added: of factors, including estimated duration of reserve liabilities, short and long-term liquidity needs, general economic conditions, expected
+Added: rates of inflation and regulatory requirements.
+Added: The portfolio duration of the fixed income securities in our investment portfolio at December
+Added: 31, 2023 was 4.52 years.
These fixed income securities include U.S.
−Removed: government bonds, securities issued
−Removed: by government agencies, obligations of state and local governments and governmental authorities, and corporate bonds, most of which are
−Removed: exposed to changes in prevailing interest rates.
−Removed: These fixed income securities may experience significant fluctuations in fair value resulting
−Removed: from changes in interest rates and are carried as available for sale.
−Removed: We manage the exposure to risks associated with interest rate fluctuations
−Removed: through active management and consultation with our outside fixed income portfolio manager.
−Removed: Higher interest rates, oftentimes correlated to
−Removed: inflation, reduce the carrying value of our fixed maturity and short-term investments, negatively impacting the Company’s book value
−Removed: in the short-term.
−Removed: Over the long-term, however, higher interest rates provide an incremental benefit to our net investment income over
−Removed: time as excess cash and proceeds of maturing bonds are reinvested at higher rates.
−Removed: We manage our exposure to interest rate increases by
−Removed: monitoring the duration within our investment portfolio and maintaining maturities that minimize forced sales within the portfolio.
+Added: government bonds, securities issued by government agencies, obligations
+Added: of state and local governments and governmental authorities, and corporate bonds, most of which are exposed to changes in prevailing interest
+Added: These fixed income securities may experience significant fluctuations in fair value resulting from changes in interest rates and
+Added: are carried as available for sale.
+Added: We manage the exposure to risks associated with interest rate fluctuations through active management
+Added: and consultation with our outside fixed income portfolio manager.
+Added: Higher interest rates, oftentimes correlated to inflation,
+Added: reduce the carrying value of our fixed income and short-term investments, negatively impacting the Company’s book value in the short-term.
+Added: Over the long-term, however, higher interest rates provide an incremental benefit to our net investment income over time as excess cash
+Added: and proceeds of maturing bonds are reinvested at higher rates.
+Added: We manage our exposure to interest rate increases by monitoring the duration
+Added: within our investment portfolio and maintaining maturities that minimize forced sales within the portfolio.
Additionally, we hold certain fixed income securities
3 unchanged sentences
If we are required to sell fixed income securities
−Removed: in a rising interest rate environment, the Company may recognize investment losses.
+Added: in a rising interest rate environment, we may recognize investment losses.
The table below shows the interest rate sensitivity
−Removed: of the Company’s fixed income securities measured in terms of fair value (which is equal to the carrying value for all of its investment
−Removed: securities that are subject to interest rate changes) at December 31, 2022 and 2021:
+Added: of our fixed income securities measured in terms of fair value (which is equal to the carrying value for all of our investment securities
+Added: that are subject to interest rate changes) at December 31, 2023 and 2022:
As of December 31, 2023
9 unchanged sentences
200 basis point decrease
−Removed: rate exposure of the Company’s portfolio was proportionately consistent in the current year compared to the prior year, which is
−Removed: expected given the generally consistent composition and duration of the fixed income portfolio over this time.
+Added: rate exposure of our portfolio was proportionately consistent in the current year compared to the prior year, which is expected given
+Added: the generally consistent composition and duration of the fixed income portfolio over this time.
Credit risk is the potential economic loss principally
5 unchanged sentences
securities in the portfolio.
−Removed: Additionally, the Company’s investment policy includes diversification rules that limit the credit
−Removed: exposure to any single issuer or asset class.
+Added: Additionally, our investment policy includes diversification rules that limit the credit exposure to any
+Added: single issuer or asset class.
Equity price risk is the risk that we will incur
2 unchanged sentences
economic conditions which influence the performance of the underlying industries and companies within those industries.
−Removed: company-specific risks also have the potential to substantially affect the value of our portfolio.
−Removed: The Company’s investment policy
−Removed: helps mitigate these risks by diversifying the portfolio and establishing parameters to help manage exposures.
+Added: Industry and company-specific
+Added: risks also have the potential to substantially affect the value of our portfolio.
+Added: Our investment policy helps mitigate these risks by
+Added: diversifying the portfolio and establishing parameters to help manage exposures.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.