UIHC - Earnings call transcript Q4 2019 | AMERICAN COASTAL INSURANCE Corp

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Operator

Greetings and welcome to the United Insurance Holdings Fourth Quarter and Year End Conference Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. And as a reminder this conference is being recorded.

pleasure your my of Adam now Group. Equity is to host, introduce Prior It sir. you Thank

begin. may You

Adam Prior

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

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

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

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

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

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

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

John Forney

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

our publishing we presentation an reminder in conjunction are earnings with investor As now release. a

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

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

X helped to reserves claims and severity for high non-cat reserves tough slide QX XXXX year-end almost the the adverse quarters and prior risk our positive the measures in from was XX% development years shows to last are show from reserving our reserve see Also epitomized and cat on XXXX QX regard of a strengthen of XXXX. Unusually XXXX. help we in significantly slide that accident XXXX did XXXX our took fire was up investor we year an almost in two to a zero levels on in See suppressing XXXX. the was compared that. made tripled results year's hurt more continue what liability much presentation for investor previous decision into QX. QX QXs. and prior non-cat us should outlier trend the XX See QX we company our that This presentation What results. approach that in to very during minimizes conservative which XXXX QX to

XXXX We're position starting very off in on fronts. several important strong

million the annualized we December at look policies rate XXXX is $XX up, hitting took premium investor rates ramping in the rate many without from incremental increases slide rate alone. policies. First to actions and a York presentation, X to hit in which renewing are is large starting recent And renewal month in any most New impact that our the from Florida this just yet from of

bright. market hardening commercial that to and rate the a Add picture looks

XX% XX at the mentioned our conservative for IBNR. and year higher slide With XXXX. noise take in looking no the XXXX how a off to for QX and are addition up almost much reserve we earlier adding reserving in to much presentation a much development year-end Look and are I from as reserves reserves strengthen XXXX both non-cat. to see of case posture year more overall it's ago table our investor cat Second, reserves of accident reserves we adverse lot

Third, with mode total reinsurance $X reinsurance world in reinsurance of the the year. we purchasers property largest are most cat of of the in of limit billion buying XX across over U.S. one as our programs

internal a Our the which that broker of made that business the Skyway program investor great best placed. of our See on XX% XX team is core already our have and XX shows job XX they great is reinsurance progress tower over and on in cat Re, slide at the renewal our renewal. presentation did

them look forward We the long-term program. partners reinsurance of have amazing with XX% remaining on to we and working the

few the past reflects Fourth, cat anti-fragility The book and losses growth down value XX of compounded for model. of shows seven-year per the long-term years business slide million $XXX almost XX.X% of value our share slightly. annual capital presentation rate UPC's as in is book strength investor retaining of the despite only

Our not balance retentions. full two hurricane is if and sheet we to XXXX need capital in strong will suffer we raise even

All of in our ratings for our were insurance December. subsidiaries affirmed

complete adverse nearly currently So and program we're a to forward development to plus much and adequate is reserves operating that's and why the overall the no we're we're XXXX stronger environment. in to looking stable capital the off start through, thrive base increases good challenging rate With and rest year. reinsurance optimistic. of positioned flowing compete a

remarks. I'd to to point this for turn At it like Brad over his

Brad Martz

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

to ended compared $XX loss of December of the $XXX of gross year. million an quarter the year-over-year, include million a before of million XXXX in fourth quarter last a premiums increase XX, pre-tax tax or earned X% loss income $XX.X million which for favorably Highlights $X.X

loss was $X.XX or $XX.X of loss ago. net or than a $X.X also share better A net million year $X.XX that share a a million

a core $X.XX share approximately or ratio. cat against a added share a after year $X.X Our a a to or tax loss XX million penny the losses million unfavorably to million of ago of $X.XX share combined loss $XX.X over $XX.X a compared a of and or points

increased written million approximately $XX primarily X% year in ago showing or than ENS with a year also the XX% decrease X.X% a of from with ago. written to increased quarter regions less Premiums period growth same accounting the $XX.X increases modest premiums for Florida a due other premiums from year-over-year all million assumed the commercial for direct

premiums year premiums were $XX.X year. which current million gross of of earned $XX.X was to Stated compared quarter last program sessions our due increased earned premiums compared in quarter reinsurance change to XX.X% The XX.X% ago. were million a X.X% the XX.X% in or earned gross or quota the just to share to

from ceded premiums the the share quota gross of year. to the Excluding ratio prior was earned unchanged

revenues ago for quarter loss unrealized company's to quarter effective to included equities of and due from fourth additional tax of tax expense items same the the impacting year. valuation in the which $X.X million total during million gains period significant a compared non-recurring income year and XX.X the the rate distorted a Other an unrealized allowance

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

approximately increased our the program. stemming net [indiscernible] plus under events from million by and storms retention driven quarter new were in of aggregate from primarily losses three reinsurance [indiscernible] losses older retained a Catastrophe $XX.X with tropical remainder

XX.X% ago. of year-over-year. Underlying resulted This or year XX.X% gross loss LAE unfavorably $XXX.X ratio to compared in was up loss an which a in million, $XX.X XX% underlying million

years fourth As fire reserve but primary John claims as prior high driver by liability during were mentioned reserve and for we future of quarter loss and strengthening deterioration unusually non-cat underlying to in the significant the severity losses periods. from the XXXX the mitigate accident sought the on impacted the risk also

expenses rose or X.X also policy in XX.X to primarily in year-over-year. increase premiums. of million UPC's for by costs decrease driven which were $X remaining The of loss expenses $XX.X was due in quarter. X% contributed to increase LAE the administrative increase expense operating driven and a loss The underlying general acquisition million million an to by which the adjustment was million certain growth reclassification

prior decrease expense Our ratio was a the nearly gross a point XX.X%, year. from of

with in of liquidity our maturities On rating under The and approximately assets XXXX. billion years total the composite was excluding a assets of $X.X share approximately UPC $X.X remained million $XXX our portfolio approximately a duration just billion total unrealized during of return with the per equity sheet of $XX.XX of investment X overall X% of produced fixed our with UIC an value increase cash gains. X.X stockholders including an at book XX% of the plus Shareholders balance or year and $XX.XX year-over-year. attributable ended

I'd now like reintroduce some closing John for remarks. to

John Forney

the up are point this We We're ready material not we pleased interest the and sure to have that which impacting with shape affirmed You starting a ratings in our in this no happy rate are questions minimizing but with We're Thank any show it's need pricing and in appreciate I'm we'll happy point. done our XXXX of and our XXXX. QX all UPC in have multiple financials produced our development we way to in a financial raise in adverse the you're no be Brad. having material you in that to reserves we've your XXXX, taken show actions certainly good to reinsurance lessens to at recently. accident and for take of strengthening able XX% good increases ready at program probability were risk to for capital for is got that year too. been XXXX Xst in June capital year we that a results while our reserve results

Operator

be [Operator Fargo. first and Wells coming we Thank gentlemen you. Ladies will is proceed. session. question question-and-answer Instructions] Greenspan the Our from with Elyse Please conducting not

Elyse Greenspan

you the combined Good in bit was I Florida Hi, on some higher, And losses were related more My of quarter. guess pointed related the be XXXX? to that you of the off or how current was losses I year mentioned to just to much much second strengthening the other thanks. first to would me location? liability quarters I accident you throughout parts strengthening three losses could evening. quarter a color question us guess that how strengthening, then get two of prior sense states XXXX. first the a more or were in question, little to and different the hoping my give fire geographic for underlying

John Forney

outlier presentation any were book quarter. compared Forney. that large pattern second And huge the we the you wasn't there losses strengthening losses and to which of liability John look is that. I'll is just fire amount the I'll this on series prior The Brad Elyse start. of investor some take spread saw that question there to Sure unusually except QXs at the it particular throughout a throughout states that were if were let

Brad Martz

in was XX year-over-year net loss and non-cat fourth $XX in the change presentation $XX the on million of reserves our side that of million page LAE total approximately So the on see can you was quarter. of

Elyse Greenspan

great and fire it you That's I was expect terms Okay. of then losses some expect sense of how like pointed versus to you the that for book. into based catch you normalize XXXX? to and other of three us guys there quarters the right a guess obviously Can then in going XXXX give you up a of underlying liability off the coming just and trend your into rate through XXXX increases have sounds you kind the

Brad Martz

period I fire. we causes can unusually loss lost those Lost December saying year that period don't absolutely two anomaly it to to costs by a are this comes of for the was just an January ago. months so and December guess the same for level high severity happened when quarter the difficult expect were Generally same we compared start loss. of

John Forney

add not have extreme seen into continue trends XXXX. we those I But will

Elyse Greenspan

guys, you Did quarter? was in the estimate Okay. your change gross Irma to hurricane there any loss

John Forney

No last yearend Not change. with since that, we no. investors communicated about

Elyse Greenspan

two questions, number? give Great. Okay. quarter. just Brad of of the usually surplus the you numbers Do think have then us end And you as the I that

Brad Martz

or the I before be annual statements filed. when have that. Those are don't on available X will March

Elyse Greenspan

a you I think amount and modeling we think then one about of about in like mentioned rate catch you is Can the as kind we there what and Okay think just should as what off XXXX? give assumption then tax said. us up this that was tax you

John Forney

about the have net that is the of it premiums at The one IRS XXXD us it of, is The prohibit separate and about in talked assumed for rate we operating utilizing limitations has got quarter. operation. loss sale super being XX% complicated loss from written some that a that's different that loss one runoff quarter dual last in for three potentially consolidate amount really line Lexington the tax quarter fourth unchanged and the and been the in We've accounts a to the decline state quarter blue gets net the of put federal put runoff operating a share by elections contributor to the and but our placed the was which with guidance rates. filed blend driven

Elyse Greenspan

That's Okay. helpful. Thank you.

John Forney

Thank you Elyse.

Operator

you. Thank

comes question with Please your from Raymond next proceed Our James. with Holanda question. Marcos

Marcos Holanda

Hey my question. us Can there? picture. just a big guys a exposure [indiscernible] UPC's a reminded is you've give market thanks of for I us question, in sense units of macro taking what what maybe you had big seen and guys commercial

John Forney

do company coastal been Sure. several including the ENS other of carriers their pro-rata premier XXs some assume The of is premium through is wind in assume of AmRisc MGA we've is the that our AmRisc. some businesses them doing with XXXX to but quota business which and in American portion for the delineate with which with of cats. their business long arrangement market lines have owned AmRisc cumulative a has with XXs by commercially and we their year that date business share been with time big that that a is and It's admitted earnings since ratios inception share very always that combined good that market writer they release of the we all right company several to through book that surplus in there that's that BB&T the

that supreme believe proven the AmRisc's ENS and business and track we that XXXX XXXX. quite is ability in have in that be hardening good have confidence here we So is half market and evidence seen to especially in of we in record second their going underwriting commercial

Marcos Holanda

on of you us into there XX% of the give sort volatility another before and heading kind just and locked it of one a expect but what Great guys renewal? reassurance Okay. you you have price down of that June just sense could

John Forney

U.S. to of win-win the cat XX% reinsurance with got done, relationship we've a one biggest of said property have we committed of reinsurance we the in partners. us long-term As it They're buyers world.

long-term certainly take fair are from to and that a us when increase expect about talked and very a people renewals to and percentage that given So with us them but us that's we have trade going really that relationships have happened be win-win they we what manageable to and view for we fair everything never means win-win it's already.

Marcos Holanda

John. Got it. Thanks

your fire What's give more just us of cost lastly Thanks a these and for like? average claims answers. there. Just look flavor can some you color what liability the just you

John Forney

Well page of five presentation investor gives the you the loss severity.

well average your that the quarters. least at So cost for the previous as as quarter four

be high has I burning very years So seen than today in maybe for industry fire can and building with homes severity the materials, very other losses low new increase. think frequency with entire quicker severity past things plastics, fire lot obviously lost but a

Operator

but with next Matt move is quick next live. We'll Carletti question your line as from reminder, Instructions] to you. Thank The proceed. [Operator on our Matt does JMP. just come a Please question

live. a final Matt your with question. reminder as your can proceed You line is

from Returns your proceed. line Bobman [Operator next with proceed with Instructions] Managements. Ron Please you. coming of You question Our is Capital the may Thank question.

Ron Bobman

I have a the good pending Florida rate had Hi, it filings and one might you question be? what about size of afternoon. if

John Forney

several one filed that months Florida. our product XX.X% filing ago for used writing was with We in

systems. was into got months We have so the have last it programmed that just we our implemented -- of in that we couple that did

here there some Florida have to out rate renewals big we a we basis. see starting had $XX.X just recently states on doing problems go are for we with and a monthly presence So the that the where in first that indications are like

increase other this we areas with repositioning a some lot which a in have problematic will on the top So just ratio. in of includes have and it. loss Florida bit quite state of help certain the the that terms we We stay are of think closing done of rate non-renewals specially of going to been of

the need very well think are we like we sure are we positioned state. to and are that what's a So that challenging it we make we getting hawk been but monitoring a rate

Elyse Greenspan

or Yes. XX% to separate that Relatively apart something reinsurance that attributable you this XX? is include cost your does from the that portion increased Thanks lot. a mentioned and John a

John Forney

for to Yes an not increase we have cost. reinsurance did justification file

that based on couldn't, in So do placement we came because our last didn't we wasn't how needed year. it

Elyse Greenspan

best Thanks Alright, luck. a you. Got of lot.

John Forney

you. Thank

Operator

floor now comments. over for concluding you. additional any would Thank the turn I like to management back to

John Forney

Once we again appreciate interest UPC. everybody's in

for on We are look to we again hard future year. of Thanks year be your working make can that interest. talking to XXXX this a you proud we all to forward and calls

Operator

and concludes this participation teleconfernce. Ladies gentlemen disconnect does may lines your you time. We thank and this your for at today's you

Adam Prior	Senior Vice President at The Equity Group
John Forney	Chief Executive Officer
Brad Martz	Chief Financial Officer
Marcos Holanda	Raymond James
Freddie Sleiffer	KBW
Greg Peters	Raymond James

AMERICAN COASTAL INSURANCE (ACIC) 20 Feb 202019 Q4 Earnings call transcript