UIHC - Earnings call transcript Q2 2022 | AMERICAN COASTAL INSURANCE Corp

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Operator

Hello, and welcome to the United Insurance Holdings Second Quarter 2022 Financial Results Conference Call and Webcast. At this time, all participants are in listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Karin Daly, Vice President with the Equity Group. Please go ahead, Karin.

Karin Daly

good and Kevin, you, afternoon, everyone. Thank has website at Insurance also made its on available broadcast www.upcinsurance.com. this UPC A replay will the be available for approximately call. XX days following

presentation Additionally, earnings of copies find company's in and the you section the of website. Investors can release UPC's

not that Board call of be Daniel facts Officer, believes like the historical President Chief company, the and that Bradford Bennett note Chief Financial Executive I'd assumptions Speaking today based Officer, statements. of statements Martz. and forward-looking and this The will statements and Chairman these are made on R. during Peed; estimates, On reasonable are to plans. behalf company are

materially be However, report materially the the underlying Commission that our other to Form from the annual recent in section if may with results or Factors subsequent or XX-Q. or forward-looking plans Exchange could arise, Risk if cause or risks found actual inaccurate and estimates, U.S. the forward-looking or in reports statements. statements quarterly differ the actual Factors on those implied assumptions expressed XX-K by in on Form prove most uncertainties could Securities our vary filings of results

call by only to no any and date are the as except With over Peed. speak that, we statements. obligation forward-looking to law, on they the as Mr. pleasure which statements Forward-looking to turn of update revise required applicable undertake made, or my Dan? it's Daniel

R. Daniel Peed

more activities I'm our to in joining our numbers. and on CEO for and second earnings of Insurance. Karin. Thanks, Chairman will Brad thanks Martz quarter, overview second some offer Dan planning us and provide then call. quarter Hello, specific of the UPC an of I'm Peed,

busy. was quarter second The

Insurance X, lines lines lines entity. closed as and our lines, commercial lines with to five both surviving Company expenses. merged the American UPC business, these Company the our to In and Security personal surviving UPC from effective merger the simplifying Both During three, and the personal on of businesses, May of effective we done Coastal with American restructuring Family Journey quarter, June XX, were commercial we capital we and closed entity. the In lines Coastal businesses. personal commercial companies reallocate our and reduce Company Insurance Insurance writing structure as out separate

The catastrophe in the personal continued reinsurance the results. theme to amount our right-size the business derisking of X/X needed is was Turning and main lines that to reduce portfolio renewal. necessary at

when successful the portfolio continued We and reinsurance with the TIV the rights XX% the This enabled transaction. considering the core XX% renewal down lines to shrink the hurricane renewal. year-over-year personal portfolio Southeast approximately down of catastrophe PML X/X

lines Gross premium. by However, renewal premium rights, earned the down XX% ceded headwind mostly a were on of 'XX. driving $XX.X shrinking earned million, litigation, to The at the than earned factors shrinks net against non-catastrophe $X Southeast the a by gross underwriting This sale valuation faster which earned to as ratios excluding with asset. valuation XX.X%. severity. allowance premium increased from million is down tax was in allowance improved increasing million core drove the second included personal our $XX.X the from loss which deferred in significantly performance due premiums the of million the while $XX.X temporary both XX%. our excessive about reflected Losses $XX.X ceded by in were has up premiums and lines personal quarter portfolio creates by loss XX.X%, inflation claims continue poor impacted and a million, catastrophe a be These core earned

in in a However, minute. our quarter, commercial as lines describe business performed second the well I'll

These across rate exposure our In personal are average activities. increases XX.X%. to the lines, achieved we compounding side, management On and with the increases rate achieve of increases we activity XXXX. achieved in selection continue compounding risk rate with along core XX.X% portfolio underwriting

our insurance core We XX.X% on our continuing which to valuation, renewal are in increase average also delivering XX% an with accounts. portfolio. initiatives, lines we're Between year-over-year achieving personal value average are rate and

second last of our SB surpassing average the wrote in at $XX.X first million least For and an commercial XX.X% over for believe in excess which of the of million $X.X rate for This an for XX% down the in see lawsuits. for written help total of the begin of We second for quarter quarter, lines, earnings from to commercial in first quarter combined litigation June nearly in of XX to had a as million and percentage anticipate for pretax more the of the XX.X%, with and that of resulted we continues lines increased million of personal 'XX. good the lawsuits to provisions quarter Florida decreasing litigation will litigate, the ratio XX XX%, first SB from to we quarter a in $XXX lines, applies or the by and We the adjusted ratio 'XX. issues $XXX increasing underlying million. quarter $XX.X Florida peak wrote of XX time growth to intent the rates July of notice Commercial XX number months. when of quarter next premium combined lines second 'XX. slightly XX.X% gross versus continued

will We impact X-D and also litigation favorably in provisions X-D believe SB in the excessive Florida.

of loss effective were X, date date the of XX. near claims after a XXXX, However, to with the July benefit SB of much

but has UPC's of unpaid of to asked for any covered frequently you through market circumstances. Florida Corp. XXX% under that Demotech the summary payable and XXXX. its event, the subsequent endorsement Citizens loss arrangement, A stabilization moderate. through UPC Under exceptional for As by arrangement a participating in August liability effective June on X, Insurance that arrangement assume the questions is I downgraded is great Property will M website check to OIR on certain The invite from X, Citizens a for out. Florida UPC

to -- Agency. rated continue minus of by second UPC Bond A be Company, rated Coastal Kroll to summary, Insurance Our change. lots quarter A, our subsidiaries, In and Interboro minus be Coastal, American And by American Rating A Demotech. Company rated and reflected exceptional are Insurance continue Interboro all

to continued which personal the drives net the We premium lines decreasing derisk of in lines. headwind earned portfolio, personal

poor our Our due to business personal tax core performance as lines asset. a against is deferred in allowance the loss well valuation as large

However, the on approximately allowance $X excluding valuation by million. improved core year-over-year loss the a basis

in Company Coastal commercial our litigation for the lines will expenses. Company and Insurance prior for and and We continue company levels and personal merger causing increased structure into current excessive This years. to significantly We UPC accident simplify severity restructured experience Journey lines. through the Florida, FSIC in of Insurance reduce into American inflation

and Our commercial growth hard and litigation the commercial expect catastrophe is positioned that, and and to And recently position Brad market-leading activity it lines by a foreseeable residential specialty future business for excessive skeptical Florida market, profitable a the market reinsurance headwinds is levels. With we remain lastly, in Martz. capital niche. a hard to performing well for to elevated continued created due I'll turn over with

Bennett Bradford Martz

X and ago. Form the The $XX.X roughly share or approximately core Catastrophe $X.XX quarter approximately President against GAAP within year million our loss company's $X.XX review necessary several valuation PCS share. pleased driven which year reduced million per primarily base $XX quarter $X.XX the from was loss loss a in ago losses million accrual loss me, current a share Thank a carryforward, regarding XX our more these per hello. quarter, to prior to of by $XXX.X getting excuse earned included that the compared our over $XX.X several loss a given which our million per X is XX I'm was came due the record of quarter reserve $XXX.X exposure, prior a combined year-over-year uncertainty rights smaller million -- million adding points press to equity per year gross the $X.XX share XX% by second million June of reserve loss Other decreased asset. to Pages after million the UIHC's tax, retained about in well reserve a net net period deferred or of net over cession of June prior loss X and as to on to everyone investor share. our of and deemed GAAP retention. share our presentation included results from of to favorably the due the to million XXX% and in at was same events and PCS was of lines $XXX.X year. over exposure adjustment noncash share compared net million items ratios income net our in of or XX%, million, our or events federal of tax that year-over-year. the $XX.X $XX.X both renewal allowance or impact catastrophe income results non-GAAP CFO added XX-Q declined X were or about unrealized lines our $XX.X per book earned losses consistent $X.XX of commercial significantly per less last a and which also valuation to items development, million, business; are noise the $X.X UPC quarter year personal development, a $XX by encourage XX%, periods. net development current expense Highlights financial performance. $XX.X due our as decision quarter catastrophe year loss operating rate $X.X of a of X included our lower reduction of approximately our the Gross approximately decrease $X.X year-over-year core invested total, with prior EPS earnings lower quota the our This XX% premiums losses and utilize premium presentation higher $X.X of were Ceded continue due fee declined million or real On million, securities million, from our release, $X.X year Insurance. that premiums the review $XXX to of or rate share strengthening net which portfolio. to written flood a investor demonstrate million and assets; $XXX points million to losses lines. XX% increased Dan, share cumulative total in lower charge, core you, our and UPC's revenue than we personal and UPC's to share investor of highlights the million for across of $XX.X tax million $X $X.XX ability Brad more and allowance a approximately new ended X. of past and $X.X In core with expectations the after and presentation to investment slightly for rates offset on year included The $X.XX but for accident XX, compared ratios. of Martz, same of Page the million information were sale those loss during net This XXXX reserve

mainly to underlying results inflation acquisition was of or our side. business This compared almost down reductions which were adjustment presentation costs lines, loss our produced agent by UPC's last to investor X XX.X%, X Page XX% profitable $XX.X continues the losses, lines business. commission year-over-year. nearly million Our and summarizes of results This in loss decline operating weather-related year-over-year. net from million, our line line for million loss points $XX.X XX% on expense and results by personal commercial expenses was of decrease ratio disappointing $XX.X up an year. litigation driven to of or a led show $XX.X underlying personal lower was very million, but

expense to to points on presentation premiums Page direct shown excluding X.X commissions Our of our ratio earned. XX.X% expenses, increased our gross ceding investor when year-over-year X operating comparing

inflationary in been a increased reinsurance change but help Expense Page X high our of X very our and ratio challenge portfolio cost risk the highlights some XX.X% period. to and going lines to is priority of with containment personal for expense significant investor a net presentation much so pressures changes significant us our has reduction includes of reconcile inclusive points forward. However, sheet this balance costs.

XX. allowance and to book the concludes rates our UIHC per stockholders the interest loss of for attributable a $X.XX. portfolio. million in $XXX $X.XX by book comprehensive and value impacted have book to book equity in investment That June value $XX.X tangible approximately per surplus you share. policy And per per accumulated to GAAP related share $XXX valuation other with for led was share unrealized quarter our Insurance. to statutory declined to assets of for end million. tax share remarks fixed share thank over tangible combined Our the per your The on deferred income to our losses, this, UPC value of valuation at decrease $X.XX value with declines our Rising today. prepared at This Group interest million We continued second caused

Operator

Thank you. That conclude webcast. today's and does teleconference

may We participation today. disconnect thank a your line have at You time, day. and you your this for wonderful

AMERICAN COASTAL INSURANCE (ACIC) 9 Aug 222022 Q2 Earnings call transcript