UIHC - Earnings call transcript Q3 2021 | AMERICAN COASTAL INSURANCE Corp

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Operator

Greetings and welcome to the United Insurance Holdings Corp.

Third Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, that this conference is being recorded. the Equity to Group. turn Prior host, now The of will conference our over Adam I Thank you.

begin. may You

Adam Prior

Thanks so much, joining and good afternoon, everyone. us. Thank you for

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

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

happy welcome be contact and to a you also office at send We XXX-XXXX, copy. (XXX) our we'd to

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

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

Dan Peed

overview discussion more questions. Martz then of to take Dan activities, our and call. on of Peed, and we'll and Adam. some UPC specific our Brad CEO and thanks an of Hello, then third I'm us planning provide joining I'm offer Insurance. will numbers, earnings Thanks, Chairman for and quarter

exposure results exposure XQ, earned Transition our management, our quarter the In reinsurance, is $X reflect spend. significantly net through are Hurricane growth $XXX and hurricane execution This this expectations year $XX and Plan. knowing impacts reinsurance we is retention catastrophe with seated reduce down in levels, XXXX to we continued with increased third that increased line our drive and in million plan net But retention in reduced increase this The of to hurricane year-over-year. approximately which see see also million an versus XXXX. million reduced core earnings about as premium going

As and in to capture go continue portfolio the in reinsurance rate the earn can forward, we increased XXXX. spend XXXX our which filings, through we will

is year-to-date On reduction, down the gross exposure and by XX.X%. our personal lines continuing TIV

another about annual for We near in X% expect reduction XX%. an QX

continue to personal expect in We exposure least at reduction next a decline least year. for year September XX and anticipate next lines XX% at through of XXXX TIV

to we XX.X% record third the renewal drive personal On of continue portfolio. lines business with in entire all average compounding nearly states, quarter a rate the front-end, increases across

least continue Over XQ. dozen the double business down. markets the last million Florida expected is for Despite XXXX. rate increases, commercial end low premium are have these lines range our $XXX to four increases underwriting in on positioned well portfolio. million Rate Commercial at in the nearly we that with leader of with retention renewal like accounts years hardest to since profitably Coastal, American one with digit while XX%. Florida of the excluding record of quarters, grow to expertise market perform In a $XX.X year-to-date increased exposure P&L well a of Coastal compounding the have up continued in XX%, over we is mid like through to non-renewed premiums in residential renewal remains a extremely approximately XXXX. American

to flat, Profitable selection. and three increase includes include years. premium maintain doesn't is therefore we balance XX% our a commercial over rate XX% we plan just approximately between to increase. anticipate to XX% XX-XX also rate and and management. to the underwriting risk for It moving personal a lines an XX% increases levels then average and towards exposure plan continue exposure commercial next lines Our XXXX, book the And

have implemented development would risk underwriting a We the identify applied that many new of changes renewal be Mosaic, algorithm business to measurement including advanced technologically to drivers. and loss

was physical combined a risk tools on formula We peak for of component to in Florida supplementing actions success, underwriting top comment levels of key Differentiating September significant between toward month which company. X our lawsuits least drop risk at June is approximately we can initially underwriting a we've of types for in unacceptable underwriting are drive I'll these offer becoming levels. ratio increasing a a with as inspections XX, Senate increased or a XXX long-term as drive July and per at that in XXX Bill Brad to effective from October. and quartile going seen but 'XX, decrease

and impact have and be it the cost to maintenance reduction with Florida of it of statistics insurance reserves appear cases significant enable too as the market to years, The [ph] remain least as suggest personal be expected has to should on hard escalation. is While lines for run-away for in extended notification especially time, remains litigated stopped market as claims at for in it savings defense and and firm both settlement commercial made insurers is pre-suite were attorneys. Florida and period residential. The does There to many in of quantify litigated XX% and the made good in an provisions continues plaintiff payments claims, early a to insureds. current

again XXXX our with through results line working with third continue we transition expectations. quarter in year, UPC, For

quarter With to Brad profitability achieving a toward and to return underwriting Martz. in this profit XXXX. to fourth it XXXX, I'll to year move strong of ROEs in the and targeted in expect turn We over continue that,

Brad Martz

Thank you, Martz, UPC CFO hello, And Brad is Dan. and of Insurance. President this

and results, review more for encourage the to information better all thank presentation press you American but financial Form review First, pleased everyone company's service. XX-Q for UPC's state regarding and I'm our happy our we performance. Heroes, release, investor your to

share million share reconciliation reserve of the quarter to declined this our On which compared costs year-over-year. of decline presentation, work a $X.XX our and stated the investor or ended our to underlying earnings, declined $XX.X X And XX, losses GAAP of protecting the exposure to quarter. $XX.X throughout new in UIHC approximately see policyholders making positive signs team our development, year in on loss or due proud hard $XX.X showed $X.XX $X.XX good mentioned in third Page year. that of reduction higher Gross of our For our $X taking of is which or I'm core you believe a the several was reinsurance objective million is personal of XX% The leverage per moving quarter or a a reported and as by last UIHC catastrophe September the loss core million right progress primarily associated I continued with $X.XX quarter will core written a $XX.X prior net driven share or XXXX of loss for Dan a share excludes of capital. care million wake catastrophe premiums losses and our direction. intentional portfolio. reducing lines earnings roughly million

a a UPC's due from dividend year ago. million net yields the in income at $XX expense losses last quarter million $XX.X loss And earned of year and year-over-year, million, and reduction third a the by faster basically million $X.X were down quarter $X.X to million, income which Ceded from was ceded $X.X exposure gains significant gross of decrease million flat property share to personal We investment earned losses year-over-year smaller approximately of policies $XX we million whereby million a of primarily to sessions over stock top-line, from unrealized catastrophe XX $XXX fewer million are $XXX.X current are those which common quota the combined and our season versus the $XXX a third lower investment in were ratios, ceding the the or slightly in reinsurance pace $X.X good points million adjustment risk more premiums or programs, added earned. were were offset during income decrease CAT partially Ida via of loss to is our event declined equities which quarter. million, ceded incurred. million obviously portfolio, of revenue than $X.X being lines reducing loss XX% included for income, Hurricane most net at losses $XXX.X thing. Other hurricane representing declined which million during fee XX% $XX $XX.X was focus premiums in of and items million catastrophe quarter, year-over-year. due expect a force, underwriter. about total a commission loss due net were and business as

was year. our million year. down This the commercial Our net ratio in underlying from last the results over can quarter down produced be for X presentation an $XX.X the loss of XX.X%, XX.X% was year-over-year. million, in $XX breaks which business. attributed X improvement quarter our third XX% good down underlying points property to LAE loss performance our mainly or of The investor current and Page of

presentation the our rate, key to through that investor correct. having the results. stark risk time. our of our a portfolio, our past We believe investor current actions has management of litigation X contrast cutting company improve insight experience underwriting on Page Florida lines company X being getting disciplined the our profitability. more shedding are personal Page during and the acquisition better XX to the summarizes restoring some that moving more more initiatives the agency result firmly lines being more our selective, provides diligently XX will presentation underwriting working over is and you improvement in commercial some businesses over our costs Pages that lead our been underwriting Here, five risks, provides that with should unprofitable and between policy presentation period. our see results toward working intended year on hard personal investor to we're on of evidence lines

UPC's which decrease higher in early Bill new by an pre-suite operating resolution million, a commission in significantly too not It's the was were on increase current encouraging. loss partially will quarter, ceding As still following dispute costs XX new driven to in $XX.X since expenses decline Senate say $XX.X in see positive by or lower indications our year-over-year. XX% costs. the have a will This peaking is successful Bill you the requirements of have reflected XX. declined June, of notice million mainly lawsuits impact loss offset claims income are whether Senate is or our which of but or reserves, early acquisition

XX.X% net to a of our ceded ratio percent inclusive premiums. expense However, X.X increased of approximately

of estimated our attributable value at quarter-end. questions. per Hurricane $XXX.X share sheet, equity to and On XX% income investments Unrestricted increased Reinsurance plus concludes That Ida. UPC's from our as the company composite $X.XXX prepared balance to of overall year-end holdings share to recoverable The and $X.XX. billion, value now duration remarks. tangible of stockholders decreased fixed average $X.X result million cash book ultimate an loss the rating of GAAP losses we're including And XX. assets was of any book our take for ceded approximately modified with a reserves and declined of per September to a direct billion. X.X-years, holding liquidity and UIC A primarily million at totaled with at happy approximately $X.XX, $XX

Operator

first question-and-answer question. and session. at we conduct with our comes you. from Please question And ladies Greg state James. Thank Our your this gentlemen, [Operator Peters Instructions] time Raymond will

Greg Peters

personal afternoon. you good think might when I to comment a on commercial focus is get said a did ultimate and that time first lines. on I period you get of you Is stand lines to like XX-XX Hey, that objective And right? your there? mix to, would your put

Dan Peed

said years our three that year. three we moving in and Yes, for this that's are been we've And right direction. approximately plan years,

Greg Peters

Yeah.

in retention up retention, of, it though seems how the well, holding action. the despite and your ratios pretty it you sort like With I mean non-renew much you even are like, seems limited rate can

Are looking actions aggressive that. you in? at I considering this more operations or potential Interboro of states you're think other there that you're sale listed

Dan Peed

different. Our several exposure somewhat levers that is has use states, management each the in various we plan different different can and state

you significantly. of exposure year, December that renewal the to As our Northeast also, reduced XX behind that's states we quota a treaty right the know, share last on sold so with

and distance On the lot the deductibles coast commercial and exposure can management. do a more and with buildings the stuff type of you specific side, to those

of least planning next by So year. September at and for we considering of XX% we're like all down be I year, those also plan to for by our more XX said, next

Greg Peters

name guess And with one reinsurance I expect so from you the and big first and half you've slides, wrapped year, notice done quarter return protected proverbial year. last storms. discussion certainly I Maybe when we think you year? I think this profitability and first that's of coming? of renewals How -- management by think next that said you've exposure to to But of or reinsurance in second a you the then more kitty I these about a job that cat you higher and the of next I about, storms. up said has the been great of year should for into your affected when think

Dan Peed

Yeah.

which except -- one that were in first Northeast to cat. exposure year, loss, had the or That quarter but by well and second this so pretty to protected Interboro the is we the during more tower. we Northeast, So, kitty of cat have for We tended be most the we of do cat in exited and reasons AOP what York. call have our AOP we actually New a we in

bit We in planning We're we hit that's although as too the have several going. because renew bottom It's it. moment a things say to you've little at renewal down on that really been are times. the how to said reinsurance may early working that tower, change is around layers, to

Greg Peters

insurance I severity. big guess, happening the picture increased the because frequency from reduced is, train that's or much. as we're moving wreck too the a of slow figured watching in I last perspective, inflation, Yeah, question just just space auto

Or some like looked there it, you when about profitability the but some gauntlet least rates, guess specialty we cut can inflow at companies, new like on sure can't of write feels get side, dramatically of pricing the you're be And laid why the companies on, right. business effect more it at I market just the really near-term down we're have new altogether? not until side, the the in you've and going the the line commercial to have And stop your -- writing think commission doing that you on you our I'm personal should I of fine guys until business business new how for reset?

Dan Peed

have a Good our year X% is a question. half ago. we Yeah. And I flow new about down was year business what of and think it to a ago,

very new off generally are So make accounts we've effectively nice The through accounts. that almost do shut business. it in very,

valuation you Just and would think, new and good rate. good everything roofs

so categories stopped don't of And have that. stuff business inland we business on new and stopped like that as zones on like, exposure almost new some most in the and we we such specific have risks in

our very renewal are out of increased of all coming we and rates that premium our and our aware renewal new So of new almost is business. business

Greg Peters

had to and Well, will and a year, it. continue we certainly commercial Got the look great as business and hopefully 'XX. quarter that 'XX

Dan Peed

firming I've market, hardest are know, Florida businesses in quite we for we in is a and in one are of the the I coming mean it and been that and we're you attractive involved years, especially as market dozen to XXXX. I since firm obviously believe into, see markets the a going commercial Yeah, with hard

So well, we that 'XX. and expect 'XX through to go

Greg Peters

makes the answers. Yeah, for sense. Thanks

Dan Peed

Yeah. Thank you.

Operator

Thank state Instructions] next your Our Bill comes question. Tieton you. with [Operator question Please Capital. Dezellem from

Bill Dezellem

two Thank have you. questions. I

adjustment? pre-tax year to the First what led modest unfavorable or reserve million prior -- of $X.X all

Brad Martz

strange There events older on. were Brad. saw is catastrophe This Bill. that development Hi, a we some few

dozens the throughout still hurricanes. little dozens non-hurricane So events name a all reserves of but we on last windstorms year portfolio, getting strengthening, decided bit top to remember, not of do we're events. look But for good. was few And these it a of the just systemic and

there, reinsurers. but some redundancy had the we redundancy benefited that fact, In

smaller our these were events that are So retention. within

Bill Dezellem

kind Brad. accomplish Dan, Great. season? for agreement. the you what And season I of that Thank renewing of mentioned in you, think then next exposure to CAT your total wanting to Would the are you you're loss versus objective reinsurance of this you process talk

Dan Peed

Sure.

share So of and part state comes our up renew part we're our But so excess. cat AOP we X, treaties. well our a treaty of kind quota continual in as renewing as also of CAT it our reinsurance January of

So general CAT, which renewal. moment, perspective mainly treaty view the -- from easiest the is is start cat, and June have that's I'll which our to on a hurricane to describe with is X at

So very but aren't the we we're moment happy that, at fully into our current retention. with

We $XX Ida, Insurance not with this New case, on have million aggregate we retention a top pooled And Interboro but Company a companies. hit for it York. $XX have in York Louisiana, only per and through put we a our our in of event New run where that $X up like in million continued million

Again, the from we are a year. this But we Ida. yet and like put protections framework is something obviously, think event starting significant Uri, in in determined. protections, comes quarterly cat that that's may the that type also with that we AOP was aggregate So retention that we or served good Ida felt $XX And have some very we where in last underwrite there. same of against. million was and us be pretty We to aggregate is well just to but that had

we pretty the expect retentions general, with our right in are CAT where in we this So now to at be year 'XX. moment, consistent

Bill Dezellem

maximum here. and would be of one let Would cat that million Dan, question about gap point had please? talked you. a please. you've loss talk that I more you from I think this me may $XX ignorance, about Thank That yet you've ask if million your year $XX

Dan Peed

it hear applies a we the group small UPC also be may there we that that's Journey in a then retention never aggregate, $X.X But of was had them is to of $XX that pool part Insurance I pool that then And really and Security but and of main careful we a with storms very get some just million to in not like million, part even you Interboro is three Family storm which that Coastal, so that not about. Yeah. and American had pool. a so words, $X that companies pooled of our into not million mentioned, also have has and Company,

in ones, than large up those smaller hurricanes So which can our just fast ways into miscellaneous hurricanes, or protection. and as faster the some add run the

Bill Dezellem

helpful. very That's

it million as $X sounds of so your you about thinking retention? think some that, companies? does smaller that accepting non-pooled And alter are you event next roughly year's Or in like these that, about comfortable per

Dan Peed

it's another income would from of modest that like another million year. in large each structure But statement, that came protects accumulative you a get negotiation the the us we with or so matter $X And severe into I losses say thing when and we they get but be very our almost small feel up loss. a like fire they of fire does. can impact or more reported basis, the

Bill Dezellem

question. you Thank taking remedial for Great. the

Dan Peed

problem. No

Operator

Your Instructions] of [Operator next you. state Raymond from comes question. your question Thank Peters James. Greg Please

Greg Peters

obviously had I [technical Hey, give some question provide some look on expense you year, us guys. gross just ratio. both, some or movement how follow-up next can might guidance parameters? Maybe a in that think you another difficulty]. the either on net to seeing basis We're just or

Brad Martz

Hi, Greg, Brad. this is

going this impact it to a that's going have move on So the obviously a on to significant net share unlikely see quarter. that net basis, short-term, we'll in very from but depending expense the ratio. how comparable you're away on quota It's much we to probably see

gross direct to point the So see we dependent going that's upon expense year, a ratio, been has a but overall improvement which again slight premium favorably is point next the and be to up or trending always of our our to preference volume. might to

Greg Peters

think commissions have that cutting we next Won't a of effect on about year? the favorable agent, as

Brad Martz

ratio distorted we an a part have that. ceding again, very reduced capital outlook depending is expense why reinsurance for as be are That Yes. premium direct we costs But basis. how on our and needs of on a much can to

a that direct a but washed net on basis get absolutely. So basis out, on may

Greg Peters

Thanks Got answers. your for it. right. All

Operator

this Instructions] Thank closing questions [Operator There at will management appear I you. time. Thank back to to it you. any be remarks. doesn't turn additional for

Dan Peed

thank wrap and that with for to efforts, our our And call all team want for Okay, of thanks. tireless call today. our up to joining their entire for we'll you today. I thanks

So, thanks again.

Operator

Thank a parties All evening. you. disconnect. today’s Have That great may call. concludes

AMERICAN COASTAL INSURANCE (ACIC) 12 Nov 212021 Q3 Earnings call transcript