UIHC - Earnings call transcript Q2 2018 | AMERICAN COASTAL INSURANCE Corp

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Operator

Greetings, and welcome to the United Insurance Holdings Corp Second Quarter 2018 Financial Results Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Adam Prior, with The Equity Group. Mr. you, Thank begin. may Prior, you

Adam Prior

Thank you, us. you joining everyone. good afternoon, Thank for and

You release welcome UPC’s in of you we can copies find to happy earnings office XXX-XXX-XXXX, Relations send And would be our copy. the section. today you’re contact also to a at and Investor www.upcinsurance.com at

made Insurance In available its addition, has UPC website. on broadcast this

results statements federal securities call respect business Before to laws, constitute the Actual in materially of company’s the the behalf following operations product those statement statements statements UPC the financial UPC we of get including described on the anticipated a Commission. company Exchange from in any any or UPC’s the go of over the information, Mr. in made otherwise. revise relating and Forney, within those started, statements statements and from I developments trends U.S. UPC’s its Except forward-looking would time-to-time subsidiaries. or differ to the as with Officer. these Executive would filings the that, meaning results with obligation to to like specifically uncertainties, to result whether this and results information, I conference as to and read of future With and the the historical and may including and company. of call now update forward-looking result John new ahead, like forward-looking disclaims John. Securities risks Please Chief a turn from

John Forney

we to we quarter of premium history our had on QX $X.X President first our our losses UPC, for Driving balanced we QX the a book rate our appreciate only our and or annualized from our average personal Financial time saw books after of million remarks. during was and our our earned With the Both to today Martz, and both commercial me to are expense is year lines quarter the this like growth. organic XXXX at Chief are us Thanks, a XX% Insurance. despite XXXX quarter best in with join the in taking the best his that company’s Bottom best had At second results. grew Top over in Forney, I’d behalf stable you retained is in ever, On improvements results gross line, we we ratios Combining retaining for growth cat can John see and and solid $XX when had QX call. CEO half our at cat the you point, solid written Brad line, growth. that Adam. was over QX, UPC perspective. of why premiums million ever Overall produced strong increasing. to This it company. Officer. only and turn Brad everyone we loss losses.

Brad Martz

Form This and $XXX Martz, to press providing over robust program of Insurance. and regarding gross respectively, UPC to before the Brad of core June for nationwide. XX.X%, to successful and earthquakes financial income premiums and included share, $X.XX UPC of or GAAP I against of million XX-Q combined highlights an Xst a our ratios share; production billion XX.X% results. the and second But combined the John. million $XX.X you, year-over-year; a written, at of reinsurance our protection $X.X and encourage highlights biggest UPC’s million information with those, am pleased $X.XX we property increase Thank is of remind income underlying or net X.X% of $XX.X core with main catastrophe review And renewal reinsurance to quarter. windstorms get like of I’d second CFO of XXXX ever release The everyone our review quarter our our of more quarter non-GAAP

earned into Some over year additional million, the group's net for UPC’s period same up premiums growth million, of $XXX a quarter ago, XX% the revenue earned insight of premiums $XXX X% includes year-over-year.

direct outside thirds premium by Both up providing lines one Florida. XX% lines, quarter region, roughly premiums for where Northeast new nice X% to our year-over-year, commercial grew portfolio. growth and we lines our of the direct year, are with commercial written written nice mix were personal coming starting XX% to with led our growing the York, of each New third lines Our some approximately traction of for two was product. fastest see the from balance personal The

combining and the insurance increased XX% to of earned, related June we XX, reimbursements XXXX, which now our in the XX% revenue, had of for have effect income policy underlying presented in costs no ceding net for for Ceding or historically other has Our or it earned income contracts. assumed reductions as earned to year-over-year Other Ceding $XX.X forward. core going intended ended and commercial quarter. ceded commissions as did no our be year-over-year results expense three to remove for the production our and commissions million prospectively been combined to expense incurred the presentation costs. change totaled premiums commissions a distortive these This commissions are six E&S acquisition XX% decreased XXXX. means premiums ratio, the $XX longer ratio but months our on impact and million, ratios reinsurance will in to presentation amounts show adopted revenue due acquisition change million ceding or net income, a This to presentation and increase. million which investment adjust company's $X.X change nearly grew but for in $XX.X

million quarter ratio, a results second produced retain year year This losses last last QX points $XX $XX.X not in for loss two $XX.X this change. our combined to million loss year, cap from loss net XX. Net the XX points to three current our year. net increased combined million UPC's and compare added to XXXX added million about XX.X% did but ago. XX.X XX.X% which of losses ratios $XX.X favorably nearly X% a in quarter, gross So points did from our down ratios

increase catastrophe development operating net million, losses in policy same UPC decrease favorable current commissions the underlying ceding and The The $X.X That earned. UPC's under of year acquisition million retained the in of the earned Excluding an million expenses was X% policy to ratios a for period saw driven a gross to presented acquisition the other was its operating current $X.X resulting expenses. million non commissions $XX.X the premiums. year net $X.X offset ceding from as the $XX.X approximately costs, decreased of million year included to loss a ceded prior during which earned remaining unchanged year-over-year the were loss related just million all ago. quarter $X for reduction and mostly during million were impacts cost $X a or increase by reduction quarter by quarter.

is current basis, on expense to XX.X% was related ceding in prior operating year. and earned with XX.X% driven non million the decreases service our to the other company's recurring year amortization non-cash professional The gross quarter. of and ratio XX.X%, measure were compares year favorably AmCo decrease the expense just million commissions the are which for and expenses in The Holdings underlying last $X.X which last an by merger the comparable decreased a $X.X Company most expense

the including $X.X Forney liquidity quarter just total $XX.XX; closing of of just assets; share surplus invested and approximately at now balance for John to $XXX with UPC accumulated per like value million of The of nearly million assets some quarter. book the the income. $X.X end ended of a $XXX $XX, sheet, under under over the billion remarks. the with increased at reintroduce other the $XXX group equity approximately cash unrestricted comprehensive included for combined holding to statutory company; On million I’d shareholders' liquidity excluding billion, our increased

John Forney

out but philosophy the good years, live time aggregation seven Thank we a of improvements. as just can little hint at forward to news. and showing do do looking popularized cycling won sixth gives The de of go that UPC This and the from all gains Tour situation our platform forward together across small our concept can learning details marginal you, we that matter, QX was making marginal improvement the continued France of and what we’re that a better big Brad. for into journey. the the has has We sweating in gains. that’s really that last quarter the team every Sky aggregates the on solid

up With line the appreciate always, open As for conclude that, our remarks your questions. we we and continued will support.

Operator

with from now be conducting Greg question first Please session. Thank Peters James. Raymond comes the your line you. a Our question. [Operator Instructions] with We’ll of proceed question-and-answer

Greg Peters

growth, around questions is I question. two, other am my sheet is just going to a to limit the balance and one

your units. mentioned in rate growth, comments to with So combination of respect a and you

more provide was getting? And hoping I Allstate? more us side about and I on hoping color around could on could side? then was I that. So more GEICO commercial to provide where or Is use was color finally line the it update personal and it the you're you hoping you

John Forney

Sure.

I is, said remarks, think the way in are or I stable my to that characterize as rates increasing.

on the average line is side on in past. have things side, the Our a change premiums which and are commercial big been fairly where slightly from the personal stable up line

so good into our annualized on really in underlying feel combined book, digit growth premium And double we that's translated which about.

that rate those rates we increases now last took where we And that on that You through that -- are We’ve personal it some that the we that be some efforts remember book looks flowing intended them we get still taken and the are working action we additional significant to. year like that so competitive. way needed book. had lines fairly can year this rate our need

units So higher and that rate growth in. about needed able states in of some we some rates to to of maintain fact in take we’re even good the both the feel premium that the face we in

Greg Peters

and And on Allstate? GEICO

John Forney

that's for year either about We the to line a on both the any was significant continue one They’ve business. us. to relative you they relationships is up ago, where of Both personal remember from been changes business of number year be absolute accounted partners for those. the this announce has and And year. XX% it new significantly gone don't excellent side GEICO our ago. a strong. And up And number have

Greg Peters

as position at something then capital there. reinsurance down an and its now sheet years. prior your side, I I growth premiums to on wondering comment solid don't this growth slow on the claims, in that result, how more missing as up kind off is this. written recoverable your you go you balance surprised they you X% additional -- fact but of to And diminish if view didn't relative Brad, pay Irma maybe by question, the but that was point. you I'm want could time definitely I’m maybe gross the On can

John Forney

Yes, on say I billion company a $X.X growth. now. would We're plus

percentage XX% dollars. it's to It's wise double down. going It's digits. still terms go of So in still annualized

more So a On good basis, even writing we And number before. that's close. absolute have base. on new ever than business you an know that it's not we’re

production percentage bigger. of So been. in of higher as our than the it's the of years it's lower enforced organic It's a just rate denominators prior than gotten business been ever as because you it's new much just, noted is book, so

Greg Peters

are I your your where you at goals some know Best one just aspirational And Right. A.M. getting of point? was position? capital rating to with

John Forney

And goal, of the put more that near -- and out a it category take to midterm. into a it can little it aspirational something in we is a still sounds little maybe the

arrows sure that our in to making we business. have focused on our right quiver of us grow to the are book been We

us our you going growth know, our rated -- on of saying billion company video to you've $X Genentech Chairman last for to you lines take they get over to asked to some not time. $X website to billion mind minute going billion. had -- UPC quick that, and focused in call, a in I Chairman see premium on Vice from both if Board, billion at that at big watch means of to numbers company $X look everybody $X.X we’re story. the be if some the X.X our in to end As that's pretty And our you get a period To not to personal go premium try our

time, to grow continue us need business. our And and so, different ratings the to but And to we in order doing We anything announce to to like there. different yes, of enable that. move don't out products we we're see the to are keenly focused that this And trying opportunities direction. the to that have aware on at portfolio we we’re add in

Greg Peters

will on And you Brad, And me stop there. reinsurance give I recoverable? an could just update the

Brad Martz

credit that loss clear got Irma. of knew it on. to us February, the a Once seeing started we address to that around really, was probably I reserves. from increase In head we thought required definitely some was Sure. April, we carriers were trend one first we it that to fairly our

that's the collect did the So of some in Irma. what's we our is recoveries for estimates gross overall offsetting increase Hurricane

Greg Peters

recoverable total? just solely expected difference have you out -- that have have close out. way, Well, have of expectation of been $XXX at that would your increase the of to approaching a to expected in have be how in can is in you loss? much come different we're I gross maybe how the far to going big -- what the portion let's with paid you the still around it’s I much Or so been would and a million. Is the Irma, anniversary paid

Brad Martz

minute. tell huge I it, can of is paid $XXX -- vast chunk the a but that over majority number that million. I get obviously, for of on you Irma you. is a can Give it IBNR, me

Operator

[Operator the from of question Greenspan Elyse your next with Wells Please Instructions] Our question. proceed line comes Fargo. with

Elyse Greenspan

my quarter? Greg. much How first did following-up your is by guess Irma past questions flat I go loss about on up question this from those gross So

John Forney

we’ve way event. a about when guidance on XXXX, given ever were or post Irma in in so of release our September press was only The initial we week back

change $XXX include end, -- for Irma first sits change at half -- did million number So Harvey being of then, our a That the reserve that. million gross year and $XXX of was Today small bigger obviously, that and both with year. a this and for at reserve Irma in Irma million. $XXX

Brad Martz

we was or did any something reinsurers and our the May that with. ago we something that it June July. We Because several not by in wasn't news months -- deal we way, or of it’s did to

are most early. PCS the market less of did -- estimates, we I modeled business. that recent share losses Irma something significantly we it's the of in think the our based our still So And on on share

so our performed very well book And Irma. on

Elyse Greenspan

in rate Then level. questions. today strong investment The the on you that so a give couple the other about of million run quarterly new quarter. pretty a X quarter? portfolio for the rate or about Is And money us numbers was can or the second income shifts investment

Brad Martz

Yes, And helped a a yield healthy little diverse we boost last Obviously, had year right that’s increase. feel assets under we management. is X%. that’s fairly a the capital now over

all the good rates. advantage feel short-term, related credit we grade, rates So rise constructed XXX% high investment it’s with we’re quality on portfolios and taking rising of the

Elyse Greenspan

assumed did then of property where the commercial premium just a book any you And quarter. $XX -- can there the there? -- color is for more was in provide get we there million Can

Brad Martz

carrier couple Year-over-year of we’ve a new added partnerships.

to it’s one, and fortunate don’t commercially So in had We’ve and that very firm. some three thankful have But the assuming today we year, those we previous not have we’re so. and business enough like those we to do named we carriers a really-really counterparties we’re partnerships. business tend

Elyse Greenspan

I there come something assume quarterly this like end basis. think to some on? on how do of, premium about the level this we Is guess, might is volatility And

Brad Martz

commercial in Well quarter the is second historically quarter the strongest book, for general.

is VNSS rate the no think, million. an some under business. we I exception were of embedded that originally that cat-exposure to So in $XXX run But guiding of annual towards just given

Elyse Greenspan

one-off of in standout going seem anything a anything your of from just think I we about then, is remarks doesn’t but kind did any when good there think use margin was like quarter, the level ratio loss kind prepared it the forward? to And underlying or

Brad Martz

it's and a is. it done said number I think, safe could the think we better better, in -- to but use. like hope we I John think do to have I We remarks, Yes, opening

be I G&A pack, gross XX. operating XX%, operating, X.XX four XX%, point the our As XX the in should gross broken was impact, out it XX could to expense for about expense ratio, think, our the for it's XX.X ratio side, and side between on G&A, on like points X.XX low underwriting, have high gets points three

for should forward. going be numbers runs those the rates So those

Operator

line your next of with from Returns Our question Please with question. comes Management. the Capital proceed Khare Samir

Samir Khare

to you some? that loss. expects demand to with you increase saw gross that about the talk cause could Just Can that your respect Irma you

John Forney

market I was timeframe after has till claims. The January, the was started XX going reopen seen think it’s in legal events. that the to litigation the that it same the was thing February ramped in and -- start pretty And and once everybody litigate days that good in to can't clear that that Florida. going up industry

tile we roof you've that. about to in that a was sure believe that so fair which which saw in Florida. very pretty, of amount this ended specific And Asia timing think, heard was And being issue, roof won't I'm I the pretty up new issue, the all one. everybody that That issue a [Indiscernible] one of then expensive -- I was was demographics related the surprise, the event one a and a Bruce tile

those so but as the have things. estimate, on well And their PCS estimate initial of there's said significantly. an were our various Irma litigation our tile, two I increased than roof accumulation quite drivers, main And the losses higher

And so market. still of as our are a of our percentage the below losses percentage well share, market

Samir Khare

Any other well? contemplated have states that the rate pipeline future guys and as or in Florida you the in near increases in

John Forney

know. in operate you as XX We states

We products states. have those multiple in

our rate that our to to sort all and in our are Georgia. adequacy states a have sure rate that in including very So we're we some reviewing increase a states and have literally had for of where we dozens significant continual And we rates of date. year, continually. this filed up in constantly Texas, products different program And are make we evaluating filing rate fairly of

Samir Khare

the looks just Florida for anything that? fair there On enough. in pipeline Is

John Forney

specific. Nothing

Brad Martz

will done started. annual be indication and the in QX Yes,

I I don’t comment premature that up be about change be but to single isn’t to indication short might eight small expect. and rate There states states be likely don't it’ll four that term. be Net it's single digit think what a there’re probably in much, that could so low are be, low driver on probably overall, down And the could increased digits. big

Samir Khar

you the get can gross how cats, for there, just into And little geographies, losses with the what a that were were each? what bit, cats many

John Forney

defer to I detail -- we like Friday our on prefer that'll more have file quarter. would on the the which to XX-Q, activity that's expect cat for the Yes, to you

Samir Khar

cats reinsurance would've smaller to I loss. the little smaller on the, the with be in I share net a with the expected bit aggregate Just guess, quota guess, stop loss the I specifically covering million. the be than the, $XX to

just I So cats wondering the if there? any from ENS am there's commercially lines

Brad Martz

It’s No. all personalized.

John Forney

Correct.

interesting annual I it's that some that loss net of there events QX but pace creped the was our hit quarter, on cat non-hurricane into sort second number. we’re development on retained to think

And about reinsurance the way respond quota both the feel and so aggregate. good we programs the share

Brad Martz

is The for XX% over our models that would non-hurricane year. Samir suggest activity the cat of

So go that’s and the and QX sort was way up. QX not book obviously, of QX the way QX, and that models unexpected and side, how QX then

on in said, for non-hurricane So annualized we’re as cat activity. was Brad for our pace plan what

Samir Khar

on It that? just seemed about quick be a talk tax. to And you one expected. caused lower just what than Can

Brad Martz

Nothing significant.

out, nothing think point just to I differences. timing

Samir Khar

XXX? your last as surplus statutory And one, of

Brad Martz

$XXX million.

Operator

with Soleimani next your of from Our the comes Please question with question. Arash line proceed KBW.

Arash Soleimani

ratio. on Brad, the expense quick a question

that? I ratio. about had curious In if that didn't. million you But you quarter the was for You the out any adjusted was just reason the expense of of there past $X amortization. this backed

Brad Martz

commission come reinsurance which dealing which change quarter, distorted measures, with finally be combined we incomes, just program ratios forced for format, primarily presentation us which to track thought carefully. it share was more the that practice. an these we expense consistent We was of everyone quota know, will the And ceding from look net with as our presentation that is and It do to some at feel like non-GAAP change a has bigger our do that's and going industry uncomfortable do forward. and want with. we you given appropriate we our standard was Well, fleeting be that item

pleased going we’re So we’ve that very rectified forward. that

Arash Soleimani

any states riding thinking other the future? of states, up And states guys your you’re for addition to license. in you in terms are In are there the

John Forney

our we're specialty speaking, a variety footprint. Broadly that underwriter. cat a Arash, cat That go situations property encompasses different of current beyond potential

long-term plans, business take you present in have certainly risk cat are underwriting existing picture our So of in but advantage thinking that any will property other opportunities don't were big do we're and competency strategically to and core those that for states states. thinking us

announce on yes, there don’t states, have this are to So, call. but we other anything specific

Arash Soleimani

you exposure terms Okay. your And any doing Tri-County? are appetite, of in reduction of kind in Florida still

John Forney

we book but new trying appropriately Broward given markets Dade. to manage the well. writing is our and in the there, not in business in very are our those And performing Florida book We’re down difficulties

appetite agents book with have Florida our grown as on or didn't business Irma lost who to well do their have since lost carriers carriers We fairly appetite perform significantly Irma. have other either their

this high as so quality been And long been we've was loss in of in our new business non-cat able really like. ratio time write Florida to we that our good And as product rates quarter. a it's

So the shown quality happened heartened eight seven increased Florida that. rolled new the from and we of we effort by significantly feel results months the Irma out the in in seeing our off or of their products really fall claims books as last what's

Arash Soleimani

to if an commercial on wanted the update line. provide know I just in you could you environment lastly And and competitive

John Forney

to those team to love line the that draw on about flights with Still on competitive for they that and every agents. relationships And thoughtful their a how staying applies way underwrites in a where account, skillful AmRisc We been and business that manage in the when environment. the analysis they've us, book the premium. very very

the is still people and want those AmRisc But still business in the and products. results all lines with And the of service agents of business our show that it certainly because quality competitive. so Coastal that do to we our competition we business welcome high have in that of there of that way American we

business and in neat we cat. now. we trends It's that losing still able our been to very policy maintaining right trick, love that avoid see we've been so while And the premium

Operator

like are in queue. for would to call the hand further no There closing I back comments. to questions management the

John Forney

appreciate thanks which there the moving know puts in parts Well, big us for year their to industry-standard impacted we we a it. two in ton I not everybody, where the There comparison commission have ceding accounting, of presentation before. to accounting numbers. things back are share, that really which in changed is did last quota a

So we're issues. flips happy glad to that merger into it. to do we're But starts and stuff, merger time does able then comparability it accounting which some out in it present at And do the amortization over accounting pack. as

And this accounting comparability. income of so that core distorts

the so we And unravel us, our net line difficult But line had last it's We at earnings our income to for and stuff. doubled best we best our ever from that bottom our ever. second is had company. quarter year top

feel The over you’re support we thank company. and issues you appreciate will working comparability so time. go about that. So your through our away it. for good And for your we And much interest

Operator

teleconference. today’s Thank for your this conclude participation. Ladies does you gentlemen, and

your this day. disconnect You time may at lines a have and wonderful

AMERICAN COASTAL INSURANCE (ACIC) 1 Aug 182018 Q2 Earnings call transcript