UIHC - Earnings call transcript Q3 2019 | AMERICAN COASTAL INSURANCE Corp

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings. Welcome to the United Insurance Holdings Corporation's third quarter 2019 conference call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. is conference this note, being recorded. Please

after to ask stated, the presentation, opportunity an have will questions. you As [Operator Instructions].

I Group. conference Prior would over to your the now host, of Equity turn Adam

You sir. may begin,

Adam Prior

and good Thank you very morning Thank joining you everyone. us. for much

copies find release earnings Investor UPC's in today section. of www.upcinsurance.com the can You at Relations

the company accompanying In made addition, presentation available an has on its website.

to to contact and be happy XXX-XXX-XXXX our we copy. at welcome send office also a are You you would

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

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

call Chief to Officer. John. Executive With ahead, that, now turn John Mr. Please I would UPC's Forney, to over like go the

John Forney

behalf everyone the join time today is your appreciate of CEO President at Financial me UPC, This call. to Brad Officer. With is we Chief Adam. Thanks Forney, on Insurance. and John Martz, us of our On taking UPC

conjunction earnings with As an Adam presentation we publishing release. our are in investor now said,

it. can find to encourage our it website on I review and you You

the data be we time therein. time and presentation, of not will by analytics slide we to While to going from refer some included will slide through that

share for in growth cat personal rate lines claims obviously and after-tax initiatives takes effect commercial as continued in more ruined cumulative handling headline. and in losses the But our is us, posture, per a of in quarter results the our the increases, underlying organic and cat-reserving hold $X.XX storyline strong and both understandably, underwriting that's book. improvement conservative

cat On we patterns years. the have putting reserving the side, the just in lot events, development on IBNR a more seen given couple are past we of

the non-hurricane in no been events, years. have for the on the patterns we that have precedent And historical We in cat XX cat record. seeing development business are

if mitigate and We for and that side are to handling hard pricing the it. try as reserving working to it on will continue claims

increases the growth the digit and On of both page rate to both grow four to even double in continue with ability rates, significant lines commercial for See lines lines. investor our front, presentation personal details. show annual at more

Retention strong. remains very

that's technology momentum ramped implemented being XXXX much and finish growth strong non-cat our heading side rate, across will decline and that initiatives standards underlying results into our on to we swing geographic discussed have the calls trouble lines we footprint. full XXXX. areas while year-over-year. ratio are adjust underwriting loss in That's continues loss intentionally have recent why that have better our and to We And and down optimistic claims underwriting, we us good previous in given and our so are why reflect on The we experience. rates have the are handling personal

to turn Brad to At remarks. it over I would for like his point, this

Brad Martz

to performance. UPC's and review also presentation and Thank pleased Form This company's investor regarding for Brad encourage the release, am Martz, is Insurance. press review information but more financial everyone the you CFO our John XX-Q hello. UPC I of results to

earned million million, share a of share of $XX.X a million core to premiums Highlights for for over $X.XX or an losses million all $X.XX XX% include a over of a $XX increase were combined share a the $XX.X quarter approximately or from the ending of or versus or year, year XXXX $XXX adding loss driver gross results September year the years this accident quarter million ago, XX of cat $XX.X points ratio. $X.XX XX,

QX However, improved to gross also a loss drove UPC's XXXX, period in improvement six point X.X ratios respectively, ago. showed improvement compared and underlying the same year underlying The underlying X.X loss ratios year. over ratio net significant and combined and the points, a from combined year which

strong approximately growth XX% XX% premiums remaining and regions. being all the Florida the among demonstrate the of of Northeast for balanced continued to organic Premiums regions growth business. engine with the Southeast lines and well in quarter Gulf, in written UPC's for written accounted direct

Assumed declined the being share quota agreements XX% of commercial in million runoff $X.X to E&S quarter June at due premiums X. to three our current one into put

XX% strengthening the a to further same compared ago, Excluding market. period industry-leading commercial commercial property the over increased position our premiums, the year residential E&S assumed in Florida premiums

premiums cessions XX.X% earned share year. compared our the last change in to of last Ceded The earned quota to just $XX.X was million program, year. which current reinsurance were compared in premiums $XX.X quarter due to million quarter totaled gross XX% the to increased

effects netting the So out share. down, ceding of quota our ratio went the

in equity year revenues in the increase total XX% a XX% ago. Other $X.X income million Unrealized income. of a third down increase securities were included fee million investment and gains from significant net $X.X items during quarter impacting from

XX% net million loss of $XX.X UPC's million, XX.X%, development. prior-year of but losses of expense year current of and third included ratio This and $XX.X and million year-over-year. ratio loss $XX.X increase adjustment million loss an a catastrophe or XX% loss quarter was net a of $XXX.X produced gross

estimates million. gross $XX.X for Dorian were at net $XX Hurricane of $XX.X these Imelda reinsurance. a We million Storms Tropical XX set gross for loss in was UPC's our loss and resulting million, believe Barry plus storms incurred at September conservatively three only loss

loss in ultimate recognized the of this period. quarters three nearly was IBNR So

UPC's losses in retention other XX incurred The by events for program of aggregate remaining catastrophe $XX.X million was reinsurance under XXXX. cat increased driven

As was September gross which representing IBNR, XX.X% million last UPC are XXXX, and also XX, of estimated where the being XXXX. to of estimated ultimate we at more quarter, included cautiously the that Compare cat $X.X ultimate loss million of of only XX.X% of mentioned IBNR months these events reserved nine first $XX.X loss estimate. gross

contributed on million Roughly development development expected. XX% Florida the development was of prior or across we events by year and year cat $X.X remaining Non-cat loss of multiple reserve as XXXX development, accident exceed years. charge homeowners, various the the accident actual most driven to continued primarily

down X% right ago. year-over-year. This was million development, in significant on or the the Excluding ratio have almost $X from the an and year and track. very the prior cat million, which and LAE was gross us encouraging XX.X%, profit XX.X% resulted loss initiatives year This previously suggest underlying a underlying improvement we a improvement was loss $XX.X communicated of

$XX.X operating $XX.X which non-loss which million quarter. or capitalized gross million, was driven driven $X million consistent were with the The policy $X.X $X.X which million balance increase, was salaries XX%, The software. from related the in acquisition the and related nonrecurring expenses, increase increase a by change in $X.X earned expenses the to of charge million costs, an were stemming year-over-year. UPC's with rose was million of primarily by premiums remaining

year Our the been otherwise from but the prior XXXX, expense third would in quarter of have with of was nonrecurring gross ratio point the portion. XX%, line increase without X.X an

years quarter. On an maturities the to the with quarter of the our $XX.XX including with remained our nearly $XX.XX, group The surplus balance was of X.X per gains. and end of attributable quarter. billion the total billion, $X.X overall but assets. sheet, was Shareholders' during equity with UPC at invested a unrealized fixed lastly, $X.X the And continued assets cash ended UIHC stockholders of book $XXX of or million rating of A-plus composite $XXX duration the million yields lower move share to value statutory of at excluding

now reintroduce like Forney John for to some would closing remarks. I

John Forney

Thanks further at I time. have Brad. no remarks this

happy any are line to questions. we So up open to the

Operator

Instructions]. [Operator

Raymond sir. is Please question go Peters, first from The James. ahead, Greg

Marcos Holanda

for UPC. Marcos, Hi. Good in morning Team calling This Greg. is

John Forney

Good morning.

Marcos Holanda

a adequate? more I big question you the changing the out year XXXX context more bit expect the in this little of drill us to we was loss prior is, And should of on year year? a strategy guys shaping I why picture reserves for now and is development how to a be hoping down tell guess could be

John Forney

will John. that. is This take I Sure.

footprint. shown So across as tried especially years events our just are to we And as it relates that we historical have in events record. we from patterns because but strategy in XX differ cat historical development adopting our emphasize not remarks, record geographic of cat Florida, of a have especially worth reserving events conservative the these non-hurricane the to more

quarter And to so up. everything we try bump this did

have going we be quarters are have IBNR reserves previous And development, we cat on that about expecting cat these heard You it of events. in to much And more have of bulk how events. those for we had was year three our are the the prior events that's than on yes, adequate. years

Florida of are on the that we difficult we are be slightly that running very when current are reserves need going to take by a which setting account was IBNR For into year what continue yes, our driven And we environment. XXXX, how where side, lines we estimated. Florida, personal ahead still continues operating had we and much to to

in this a in place entire talked presentations. data been year. on on all lot technology, of the is focus about have That's previous have calls investor underwriting, we agency our put and That's that year, why management initiatives next previous For force have focus handling claims improving our on rate, included we profitability. our

that. are on singularly we So focused

books cetera. are shifting putting sure with agents we our find other are to the that take et rate the hands in in That means actions areas means et growth us grow. who environment That That means we It's loss operate need big business that canceling to increases. giving means on certain areas. in. try That where cetera, deck taking to that bad we through ratios, of well ourselves make the to all we stopping

Marcos Holanda

that guess healthy premiums remarks. am looking down color guys But the and for this premium there's XX% you Okay. growth I I in that. guys assumed quarter. line, us there? switching your Thank Can organic to at more you and that's give some And you singled out

Brad Martz

the in that commercial was and that one runoff. is because that quota in remarks program agreements those AmRisc into E&S E&S Brad. quota shares three went share with carriers have participate I This mentioned three of my down three Sure. we

Marcos Holanda

AOB you final great. be, for us guys that you on getting your be And would on better? if anything could there? guys an update give it's And could are you I Journey, Okay. just my the Thank guess If would and out what you question answers. tell us seeing

John Forney

rates momentum that not for the legislation to But machine We there's tri-county coming a that mostly Florida factor Sure. in XXXX. that. significant higher legislation. lawsuits don't AOB at they lot are of it's us, good still slowed by was The AOB in no not have AOB there. deterred us has it's Again, than in the see in business evidence were AOB because has a a phenomenon. But down materially Florida. We been

Operator

go Sleiffer, from is Freddie question KBW. next The Please ahead, sir.

Freddie Sleiffer

morning. Good Hi.

So do for you currently just did see increase firstly those Irma, either in an how losses of you have where and remaining Michael storm? Hurricanes IBNR storms? gross each And on in much

John Forney

Yes.

have We bumped number. Brad to those Irma in got $X.X XX% the get we about on both our events gross losses increase an billion. of up IBNR by seen to to where has about for reserves

And up a on by amount of too went will it significant have second. Brad Michael, that. that a I XX%. IBNR have We less number than And in think,

Freddie Sleiffer

Okay.

While move on will to those the next numbers, question. I gets Brad

So versus million in your preannouncement. million $XX catastrophes at come $XX

what wondering drove that just So delta?

Brad Martz

affiliates, that on. well. E&S primarily We a was commercial business at BlueLine little the of clarity we didn't delta absolute the day as The end bit have more went the conservative our

the So previewed. to higher was very combined. surprises it on been those cat There development Net was any than very, shouldn't Reserve previewed. preview. fronts have was net, a two little than lower close

Freddie Sleiffer

typhoon little the upcoming Okay. know impact Great. I renewal, activity but think your elevated recent a And you Japanese to talk reinsurance early renewal? could it's do about the

John Forney

not would on to prefer speculate We that.

reinsurance a time. strong been have a partners long really we panel As with us of we mentioned, that good have

with relationships win-win have We them.

together We diversify are put broaden our to to year. successful we with next a always reinsurance program to expect work panel seeking and collaboratively and our partners

Freddie Sleiffer

following the Okay. And then question. earlier just up on AOB

impact financial aren't sounds like seeing you your an on it results. So

rate be also won't it infer going quite AOB Florida impacting since this correct taken is of So increases forward have lot benefits rate to you so-called in that a increases year?

John Forney

continues our take losses continue not in because up. to to rate elevated Florida. It's decline, more non-cat in Florida just non-hurricane cat Right. And to in specifically level AOB. not of to ratio related loss Florida It's the related go

are rate events severe that's than driving storms need. the convective severity that It's and our previous driving in much cat rate hailstorms that's So more and need. years producing not our developing the like

can't those we hailstorms. them the rates modeled once actual what give for losses, you way the have we can in won't them the that's are rate Regulators you get for And works events. that But is, events losses doing. and those you you until through on get pass and your recoveries have

rather not cat AOB, it's but by driven by non-hurricane So losses.

Freddie Sleiffer

rate then And Right. any increases, underwriting to results? other than other you improve the are actions taking

John Forney

Yes. talked in them would included the I And and encourage which our about to presentations you we review. have those extensively past, investor in

from. are we of management initiatives We have seeing underway agency host got that a underwriting good whole that effect are

Freddie Sleiffer

of all XXXX in and movements, the just And given at? lastly, that taking, settling ratios you then currently see the have you changes some expense do where loss expense rate Okay. been

John Forney

don't of forward-looking We that Right. for estimates information. give kind

trends to so continue rate loss cat book we the and are downward of in we to enough hard ratios working have our to that handle non-cat loss see it. So in business manage we stuff our

Brad think earlier. might you the were have numbers looking I for

Freddie Sleiffer

Okay.

Brad Martz

is Irma IBNR million Michael million. Freddie. and $XXX Yes, Hi the $XX

two about of are IBNR we just events. million on those So $XXX

Freddie Sleiffer

Okay. for answers. the Great. Thanks

John Forney

are You welcome.

Operator

Please question go Cliff have We Financial. a from sir. Philadelphia Gallant, ahead,

Cliff Gallant

Hi. Good morning.

effect? Just What's looking As color. bit rates, you slide losing I like competitive just on net shows. little rate your the are in market with you Are But on take people? touched And this a think in staying the you customers what's increases, more these the you? Florida?

John Forney

in has the capital Our strong landscape on even companies retention a Florida, there's out that stayed has with are lot same increases. market changed. changed The a Cliff, these lot. Florida, The And paying losses events rate there losses has paying of a environment. with are to we in lot lots it's big company operating lots a the and a of competition of be, very that resources. claims and of on We relative to difficult paying happen

operating circumstances. can we so difficult fight And through

And so to And matter us, the increases, get rate, that. significant rate to far, If we side. have to if backlash take. which do to and get or we the we we the defections out from the doesn't other are have we going need will need not rate honestly, seen it we come

Cliff Gallant

Also wondering, comment a on to? I was had have Texas. geography you of these are but exposed Was that happened do in tornadoes we Or sort event? October, this you any come through that

John Forney

we we a million. was had have, claims That incurred event Yes. did of that, XX with yesterday, QX about on and as of $X.X

Cliff Gallant

Great. Thank you.

Operator

[Operator Instructions].

Raymond We go have a follow-on question from Greg Please Peters James. of ahead, sir.

Greg Peters

maybe a you I A.M. rating? the Journey guys. hoping on us are leveraging you update Hi Best was how guys could quick just the give and

John Forney

Sure.

Greg Peters

And to when financials? should flowing that expect through see we

John Forney

buildings. Currently apartment Journey residential commercial is writing in Florida. focused launched on business

write and a had business And We more we And seeing at marketing distribution to gained our momentum are and comfortable ever. Journey with the have agents are happen. We us. entity this the month on just best throughout help our consistently year. partners new that doing job AmRisc get on great with

and been to into in standards grow disciplined and are not very Journey a on the underwriting conservative rush We and guidelines big a have we company.

progress pleased have are the there. made we we So with that

We personal plans also in in launch have lines to Journey Texas.

ground-up be with differentiated as well product we fact, the now lines to business regulatory couple working filed that rated Texas process. In South early Texas A.M. expect months business we a a Carolina. product next lines But in its personal commercial in through way writing year and Best and ago as it's

next going years. next will year some of an So over significant part important story start to growth it's in more to Journey see few you the ramp-up our be and

Greg Peters

good guys. luck future. it. Got Thanks in the And

John Forney

you. Thank

Operator

like the now for remarks. today's turn to management concludes I over to closing question-and-answer call This session. would

John Forney

everybody want better during UPC results going appreciate earnings to Forney. look John and about I and a thank get is support a This to here call on time very just busy delivering some to again Insurance. to talk long we term your forward. season take partnership forward We and

your So again for time. thanks

Operator

Thank today's you. This concludes conference.

at Have a your day your Thank Halloween. time. may and lines you disconnect for a this participation. You Happy good

AMERICAN COASTAL INSURANCE (ACIC) 2 Nov 192019 Q3 Earnings call transcript