Ategrity Specialty Insurance Co HoldingsASIC
Ategrity Specialty Insurance Co Holdings Fair Value Disclosure
Fair Value Measurements
Three levels of inputs are used to measure fair value of financial instruments: (1) Level 1: quoted price (unadjusted) in active markets for identical assets, (2) Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument and (3) Level 3: inputs to the valuation methodology are unobservable for the asset or liability.
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date.
To measure fair value, the Company obtains prices for its investment securities from independent pricing services and other observable market inputs through third-party service providers. When quoted market prices for identical securities in active markets are not available, the Company uses observable inputs such as quoted prices of similar securities and evaluated pricing. The values for all fixed-maturity securities (including federal, state and municipal securities and obligations of U.S. government corporations and agencies) generally incorporate significant Level 2 inputs, 3 inputs, using the market approach and income approach valuation techniques. The Company did not have any instruments classified within Level 3 measured at fair value on a recurring basis as of December 31, 2025 or 2024. There have been no changes in the Company’s use of valuation techniques since commencement of operations.
The Company reviews fair value prices obtained through third-party service providers for reasonableness and monitors changes in unrealized gains and losses. The Company has not historically adjusted security prices. The Company obtains an understanding of the methods, models and inputs used by the independent pricing services, and controls are in place to validate that prices provided represent fair values. The Company’s control process includes, but is not limited to, initial and ongoing evaluation of the methodologies used, a review of specific securities and an assessment for proper classification within the fair value hierarchy and obtaining and reviewing internal control reports for relevant third-party service providers involved in the pricing process.
Financial instruments measured at fair value on a recurring basis as of December 31, 2025 and 2024, are summarized below by level within the fair value hierarchy. As of December 31, 2025 and 2024, the Company had no assets or liabilities classified as Level 3 measured at fair value on a recurring basis. As of December 31, 2025, the Company had no securities sold, not yet purchased.
| Fair Value Measurements Using | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| December 31, 2025 | (in thousands) | ||||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Fixed-maturity securities, available-for-sale: | |||||||||||||||||||||||
| U.S. Treasury securities and obligations guaranteed by the U.S. Government | $ | — | $ | 2,117 | $ | — | $ | 2,117 | |||||||||||||||
| Corporate | — | 556,311 | — | 556,311 | |||||||||||||||||||
| Total fixed-maturity securities, available-for-sale | — | 558,428 | — | 558,428 | |||||||||||||||||||
| Total assets | $ | — | $ | 558,428 | $ | — | $ | 558,428 | |||||||||||||||
| Fair Value Measurements Using | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| December 31, 2024 | (in thousands) | ||||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Fixed-maturity securities, available-for-sale: | |||||||||||||||||||||||
| U.S. Treasury securities and obligations guaranteed by the U.S. Government | $ | — | $ | 84,195 | $ | — | $ | 84,195 | |||||||||||||||
| Corporate | — | 353,805 | — | 353,805 | |||||||||||||||||||
| Commercial and residential mortgage and other asset-backed | — | 752 | $ | — | 752 | ||||||||||||||||||
| Total fixed-maturity securities, available-for-sale | — | 438,752 | — | 438,752 | |||||||||||||||||||
| Total assets | $ | — | $ | 438,752 | $ | — | $ | 438,752 | |||||||||||||||
| Fair Value Measurements Using | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| December 31, 2024 | (in thousands) | ||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Securities sold, not yet purchased: | |||||||||||||||||||||||
| U.S. Treasury securities | $ | — | $ | (930) | $ | — | $ | (930) | |||||||||||||||
| Total liabilities | $ | — | $ | (930) | $ | — | $ | (930) | |||||||||||||||
There were no transfers between Level 1 and Level 2 for the years ended December 31, 2025 and 2024. The Company recognizes transfers between levels at the beginning of the reporting period.
The fair values of fixed-maturity securities owned, and securities sold, not yet purchased have been determined using quoted market prices for securities traded in the public market or prices using bid or closing prices for securities not traded in the public marketplace. The fair values of cash and cash equivalents and short-term investments approximate their carrying values due to their short-term maturities. Investments measured using net asset value (“NAV”) as a practical expedient are not classified within Level 1, Level 2 or Level 3 and are described in Note 4, Investments – Utility & Infrastructure Investments.
There were no transfers into or out of Level 3 during the years ended December 31, 2025 and 2024.
There were no realized gains or losses included in earnings during the years ended December 31, 2025 and 2024 attributable to the change in unrealized gains or losses relating to Level 3 assets valued at fair value on a recurring basis.
The Company did not have any material assets or liabilities measured at fair value on a nonrecurring basis as of December 31, 2025 and 2024.
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About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.