UIHC - Earnings call transcript Q1 2020 | AMERICAN COASTAL INSURANCE Corp

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Operator

Greetings, and welcome to the United Insurance Holdings Corp., First Quarter 2020 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Adam Prior of The Equity Group. Thank you, sir.

You may begin.

Adam Prior

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

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

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

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

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

we of the behalf get statement following on started, Before I'd the like to read company.

meaning forward-looking of information, statements federal made this statements Except within statements respect constitute the and financial including in to historical laws, business results, with trends and the of its the the company product operations conference securities subsidiaries. in to the call relating the and and company's

statements as result and from described time including and risks UPC from a those differ uncertainties, Commission. results Securities time with those the may filings forward-looking in results Exchange UPC's to from of Actual these materially anticipated in

or result UPC's or forward-looking that, the any Officer. specifically any like to Forney, to statements to call developments future Executive revise information, turn over a update Mr. as otherwise. would new now John UPC obligation Chief I disclaims With of

go Please sir. ahead,

John Forney

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

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

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

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

you of it, ratio, XXXX. compared quarter. Loss last them underlying year's they start all off are combined expense ratio, in most We ratio, a significantly, first to improved, great combined name ratio, to

more of Our core million $XX ago, we year. even an over though was for million retained increase million $X cat pretax in losses a quarter, from $X year this the income

$XX year. up year pretax So million was our core income over about ex-cat

we phantom nothing have ag far considered, by company. treaty best were QX in considering reporting QX meaning out year-end and ceded especially this the entering losses we best was this the to that QX. since things cat now. quarter cat QX XXXX, in That's awesome, of we our playing of said call earnings a the XXXX, history year, in chance our our I less positive were on underlying of we strong was are which in seeing the position quarter and then All trends

which personal at Florida of booked in presentation. in premium rates;. QX, for slide to major the about the earned $XX $XX additional million lines premium. four investor in the would We additional of beginning to increases over show year. up First rate translate annual Look million just And full are premium

means XX% especially about has not matured which the well For bodes up personal lines the quarters book. per premium in since That earned quarter only we policy strong. yet increase in into retention for bulk saw X%, of forced the future was policy, remains the quarter our

refer We investor presentation. Second, slide reinsurance. the to in seven

world the win-win XX many our one Thanks U.S. And place partners our programs. property increases. billion on the whom manageable reinsurance done buyers very XX% we with various are to in are reinsurance over with We of top with of $X enjoy rate cat to we partnerships.

implemented favorable, million in Third, looks it by we QX table material development of way. We and Last QX. in actions posture $X.X $X.X considering the million even still QX off taking that's this the reserving reserves. year, of we the year far thought adverse development This reserve that last year. XXXX more and have were year, and took conservative we

robust. very look reserves Our

capital. Finally

remains strong. Our very capital position

caused companies standards income in as for a to accounting the or XXXX. update value book rule part to in net have securities unrealized solely was had we Given that effects beginning to operating which quarter, of report decline equity of the profit losses due solid XXXX-XX, gains the in the

this to truly of year's of capricious investors given are this referred quote investment be is QX. extremely delivers losses Quote has gains meaningless in investment Buffett per net that in we the rule $XX wild earnings as as share Warren any announcing and billion misleading and Berkshire unquote. said figures for amount can usually And to unquote. losses quarter

capital our equities. our company in is has largely investment any and for is a event, meaningless strong In losses the is is our it certainly and XX% recovered about portfolio suffered which only stable. meaningless already business QX UPC, it holds for it in position investing, If portfolio whose of paper

sticking So to we are our story.

the Our company operating challenging is currently environment. in built-to-thrive

have exposure cat we prone minimis practiced state, remote in are COVID-XX de a And operations. well are since based to we We in claims.

Kudos positive the claims underlying so all are And and technology off. our to business of transition forward our UPC or paying who XX rest accelerating. the have look are made us. initiatives our the employees handling The team trends have and for the past XXXX. seamless undertaken We over so the months rate, underwriting, in technology to we

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

Brad Martz

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

nearly year a income all the earned increase core share million, ended were a with or ago. March quarter an premiums metrics million to million $XXX.X $X.XX a $X.X compared key or XXXX share year-over-year. million improvements of $XX $X.X beginning or operating for of in Gross Highlights include XX, $X.XX XX%

profitability X returned XX% The year. year nearly combined was and ratio underwriting improvement point over of to us

gross year. and this net expense improvements XX.X% last compares both and ratios on underlying were XX.X% of ratio in favorably combined very a And our to impressive basis, also loss Our period.

from approximately were or premiums. quarter in by partially personal driven the and a for commercial lines million X.X% a assumed in $XX lines, year decline of $X.X E&S which both growth XX% approximately written Premiums X% or offset $XX.X million ago by or increased million $XX in million growth of

accounted a earned Ceded for all compared in year. approximately modest premiums of of XX.X% the XX% were outside growth XX.X% year ago. earned regions increases showing over year to direct Florida gross year, last premiums premiums Florida with from

This compared our in total current which change quota compared included to first million unrealized increased a same only unrealized premiums Other the program gross $XX.X to quarter to share share earned $XX.X impacting reinsurance quarter in XX.X% approximately were million revenues to a after due X.X% from was during sessions the year $X.XX equities the of ago. gain items of losses last significant period tax or the a year.

roughly net quarter XX.X% loss and on year. adjustment UPC's X%. the loss quarter and gains a compared year. unrealized revenues gross X% expense the the last points first first over Excluding $X.X losses equities year X.X to $XXX.X and ratio loss of million of XX.X% improved points loss net or was of improved UPC's ratio million grew total X.X decrease

$XX.X net reserve of points to Cat nearly by is losses added million which of loss million X favorable ratio offset development. our $X.X partially

loss two from was $XX $XX.X premiums in these last over $XXX,XXX items year LAE Excluding approximately down million. million underlying earned increased despite in

the gross million an year to primarily resulted by which loss frequency was operating X% current $X.X million, of during quarter. This increase a $XX.X ago. an XX.X%, ratio were This driven UPC's expenses improvement of compared or XX% lower favorably year-over-year. in underlying

The $X.X quarter. the our premium rose acquisition growth million, commensurate increase in with was driven which primarily by costs policy

gross X.X from prior ratio XX.X%, improvement Our points of an the expense year. was

balance the of cash UPC's $X.XX sheet, were On total assets including and $X.XX billion, assets invested billion.

produced most a despite fixed risk March. the the maturities for of spreads Our return assets positive in on total quarter significant widening

rating this portfolio bond up our overall ticked risk composite at credit years of or duration significant but do about modified have XXst any The we to slightly A+ not fundamentals at concerns of and March time. maintained its default X.XX

quarter to been and million book with approximately of those in already share or the equity have in $XXX to shareholders quarter. was book GAAP Declines the rules of UIHC in a excluding related value losses, equity $XX.XX were much driven value attributable accounting stockholders second reversed treatment per by of losses unrealized unrealized gains. $XX.XX the equity

due X% losses to million Group's declined $XX primarily on And statutory or unrealized the equities the lastly also our million $XXX during surplus quarter. to QX approximately during

I'd Now to it remarks. turn closing to like John some for back

John Forney

we any At Brad. this questions. you, Thank point, would welcome

Operator

Our is go Greg ahead. Peters for Please Raymond instructions] floor is The James. question coming now of open from you. questions. [Operator Thank first

Greg Peters

presentation, give in infer your said to that you Can is or of talk you it spectrum program can seven layers that core on Should remaining opening And program? you that go happen we is is perspective across that investor you think about we is your where remarks cat remaining remaining lower done. outstanding? piece? us or the slide the X% on John the reinsurance And on renewal pricing with going XX% some the the spread to what entire is piece

John Forney

throughout spread is piece remaining The question. the program. for Greg, you, Thank Sure. the

other I is think here the done. very and bits the than is it program. up stuff completely there that and top pieces at throughout the But

in not area. concentrated particular it So any is one

So speculate to to I that that talking big expiring have don't on other on we want what is on some than lines program. to pricing say to happen folks piece remaining on are our going

and with And yes, with for. very expect as to price certainly overall I we be have We are increases, said them. manageable having very planned what constructive will able but get discussions done, we within we it

Greg Peters

Alright. the across pointed improving ratio. metrics you of as you trends obviously the And combined then many in guys reported, out,

just month relatively in particularly what of relative a Some was the on the because first historical March benign have quarter with quarter, commented pandemic. to on experience how a claim going was

that Do an therefore case first flowed there quarter basis? onetime been arbitrary was benefit not see ongoing through we maybe may on some you and that believe may that that or the have the benefit

John Forney

taken that of trends best. at Greg, and and we've in true, frequency of have had. that terms because our if actions saw February handling the we underwriting that is same January improvement the the it's marginal positive claims We in in

was any the volume, the claims of downturn quarter. week was in if So last there only it in

just severity saw March. of volume, but working XX frequency were as trends been February as we So were of the out that and one have the in last on weeks, they week and reduced January we in prevalent claims

Greg Peters

it. Got

yesterday. they loss activity information and that or peers April May. One happened results of your cat announced include some And did other in regarding

any commentary. include I'm we didn't or infer - You that a guess I Should from such for there. comment anything looking

John Forney

that there in Gulf States. been We've the a historical March, in doing Sure. insurance Southeastern were are and month in spring other. some the from profitable property May one the United April clear record and than pretty banks for that and in is while. storms It We in more Coast write quite residential

property for more nothing is in that hit were Carolina. had April. in is less writer meteor We But if they areas slightly spring March slightly a are unexpected. a plan out you were is ordinary or not in of it storms. They like North you those But that. It the

like something within with yes, million, from QX So, incurred But of $XX different five in we in again PCS events April. expectations totally year's slightly the had country. for part up April last that

Greg Peters

there's guess Thank you And then other know people. you. other Thank from I - for be questions to going that. I

So can and my comment last question little going what's drop is on bit in there. the tell the us assumed on premium a you

John Forney

through unrelated with is assume distribution of American of does is book we with the premium insurance That's Yeah. with business. for which doing companies job that underwriting and MGA Coastal the way and a all fabulous that business our AmRisc the by

and we premium. up year at terminate seeing ones line. that we program, of ramp with or one bigger And that's assumed last to in program, that which that ramp to blue And business decided times decline - business scale on the that to their the why partners various you're either do the so back want call

got we've increasing other of it, it. have that some others parties are But on the that we

that. So one in again big that see upturn the to expect decided to that was But for we decline participate reason in they the didn't partner anymore. want an

Greg Peters

others Thanks ask answers. for I'll your let questions.

John Forney

Greg. Thank you,

Operator

Thank you. go Elizabeth & Tuxbury is Our Dowling coming Please question Partners. next [Operator from of instructions] ahead.

Bill Broomall

Broomall. actually back the quick just slide. going question I a reinsurance This had Bill is to

the mentioned attracted any to to think on I what what as us naming commentary you to you able market? lines. last Is you just those in the out observed program? are new partners material the - partners you went there what on those new anyone reinsurance several you call, And give partners without with -

John Forney

of Well reinsurance. Bill. buyer I big said in Thanks Sure. my we as remarks, are a

We various our have billion programs. $X across

get to we a new welcome to is program. So lot a capital It done. our

grow that always with sheets find we with are some really big have us can the our amazing continue partners years. grow new over as grown with we business. We looking to to balance partners But us that have

program. decide so sometimes not to they And year on talk that to every or we overtime And haven't program on people our program. are on to come the been our

several the program had came as year in program. were those And did that so. them to was of we to said around material I these markets in decided amounts. that this on and world time our right And some And for come was our that to different out it partners the

good So the in the impact we've be and receptivity on are Obviously, out markets to figure reinsurance disruptive trying now and reinsurance them. to seen what is markets. going right COVID-XX

And the that people a fact so remotely. as been well that's as distraction, working

set and do than are people more up some companies to Some others. it

it or And are next inefficiency We've They've We've feel and program a introduces in worked patient. we month so the it. good over the the And been bringing been landing into through for process. patient. here about we so. where

Bill Broomall

being reinsurance one programs, heard cascading about in on you. the the some Thank a coming media and of to this lot feature terms changes staying Great. reinsurance. conditions, year specifically programs. And maybe on just We've

just terms of what not changes offering this the and you mean that to of I might the was thoughts your in what cycle? adoption And potential cascading get for conditions think hoping on reinsurers features, renewal

John Forney

the on efficient more Irma Sure. event Bill know, is is And are you in $X reinsurance over way limit single-shot private we of cover. why else since than have XXXX out us it. why billion reinsurance that the far program first left program to out well a of it has other buy we of more when core cascading market. It been cat much our That's way. do because that gives anybody people as or

structured community is to on program. years done that reinsurance over is that going year core way the We've the support the our that's program And from this had and cat way. great it get

either doing maybe didn't true, or I not that it not our because what getting fashion. So, that think is we hearing in you done reinsurance are about program is hear

Bill Broomall

you much. Thank very helpful. Very

Operator

coming is James. question Greg next Our of instructions] ahead. Peters Please Raymond [Operator from go

Greg Peters

very wasn't had of increasing the four slide I for that's deck? was page I But bit company. to your that And positive pivot And still surprised think surprised we the a Can increase. about I you necessarily TIV. premium little a result

But or I would for you're would as to us have stopped the amount just the and envisioned capital dynamics in reset walk have allocating. the maybe of that the right you through growing pricing I'm get something that maybe TIV return slide. try missing

- A Brad Martz

Hey, Greg, it's Brad.

see if you is at region, the downward. It declining. is You'll very additional it note trend that by TIV looked And you'd different results.

regions, regions we like certain additional TIV other we in and in still Gulf So in actually in decline. seeing the particular are are But Texas, growing.

very typically the skewed the We've policy total also value Southeast. average got significantly And rate see profitable. than is have what Florida adequacy. higher we It and The of insured had some we business business in has by write is we which per opportunity. Northeast in

John Forney

And we rate rate than have The we trends key the the of And to a us. make to us, not right enables writing Xx see go, really for is which rate sure on decision for a good Greg, overall that it our faster contribute trends. the of growing and granular us analysis see time, some metrics. TIV, are something capabilities going at the granular you profitability the whether is the make are metric to growing those loss is based at or profitability to now is very very no-go

standing we where are right we the and rate business flow we business by we this are comfortable at now, point. the can't so places And And business profitable writing through. is the good letting write are

Greg Peters

claims or be year, last in that don't you, front business question you of versus do the you The data the if second this closed us and considering quarter sense think your going that on give have type Okay. evidence what pipeline you reserve development. last in and will that have happened, you Can what of particularly the claims in that a of quarter don't same just year? in second have development you're to of quarter reserve third third adverse open

Brad Martz

of struggled our last Those year. 'XX Family responsible are & exiting really underwriting XX% for Security. on development United adverse lines companies with two are two the entities are and the business year Casualty, that the plus So Property personal that

actual $XX first of those for the development what expect But measure we very our business. two and to there versus was And expected favorable variance million development for the be carefully segment about actual quarter. between every development development entities, we in

that Obviously, we didn't take any income. into of

result and how midyear to great obviously a great, going are review, during We evaluate trend are for wait see pretty going out. us. trend that carefully of But plays that our sort that's continues, if we to it

times remained think evidence the development stable, some in Cycle I compelling is shape. that there we have frequency in saw in April. maybe even pretty great declines and given slightly, But March loss very improved

Greg Peters

I that assume cited as How challenges in Because it book? the because we was gave you should year 'XX. about obviously, think on year or - the exiting 'XX I you should $XX think your that - across entire 'XX how year is just million to the think related the And 'XX? 'XX exit the I about numbers the the

Brad Martz

Yeah, years. that's exiting across all

on for obviously period. So it more challenging was was actually that but 'XX most slightly favorable still our 'XX,

So anything really while we adverse significantly by 'XX. on of was see 'XX, didn't driven most that

Greg Peters

answers for Alright. Thank you it. Got the guys.

John Forney

Thank Greg. you,

Operator

over to this I'd At closing floor turn for you. Thank the back to like comments. management time,

John Forney

year. appreciate on again us you talking we the to everybody strong, time look look We safe you. We the forward and hope join to We quarter. to OK. to today. of call taking really next stays forward everybody and the Thank rest

Operator

thank you today's participation. for gentlemen, event. your and concludes Ladies This

have webcast wonderful and your disconnect at and lines day. the may off log You this a time

AMERICAN COASTAL INSURANCE (ACIC) 9 May 202020 Q1 Earnings call transcript