CNFR - Earnings call transcript Q2 2022

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Operator

Good morning, and welcome to Conifer Holdings Second Quarter 2022 Investor Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. to conference like Roney. to now would turn over the Brian I go Please ahead.

Brian Roney

good issued yesterday. everyone. quarter you morning, Thank and Conifer after close financial the its of market results second XXXX

release You copies portion the ir.cnfrh.com. slide download available accompanying can presentation Investor via of is company's discussion morning view of earnings Relations The this find management's to Web on the webcast, site, website. the Conifer's or from or

in or and this including information, conference its our risks including in note statements, trends, and with risks from of we described with well economy forward-looking of various Conifer's subsequent and information, to results, that with statements our the the and started, associated any statements statements made historical results the Federal statements, in to underlying the financial and its time-to-time filings and to products may result get Form as XX-K update specifically our and uncertainties of anticipated otherwise. the we forward-looking Actual subsidiaries. Before business, and within from those these call regard except company's company materially risks forward-looking and may due Conifer statements the SEC, constitute a the any on including the operations uncertainties to differ meaning COVID-XX as as or disclaims developments, forward-looking impact latest revise future reports. business whether Securities relating obligation Laws, new results the

Relations through link replay In on this provided the of Investor of website. addition, section a call be will our a

accounting of comparable when release to is accounting in financial GAAP. prepared is accordance by also rules, statutory as we'll measures, are measures and Statutory historical to earnings in not data discuss the measures call, GAAP defined During therefore financial SEC our our filings. Reconciliation reconciled Regulation G. non-GAAP financial with SEC these and included, possible, this non-GAAP

that, With this Co-Chief to call after I'll a Chairman over management's Q&A Jim? morning. We prepared Jim session will Petcoff, Officer. turn conduct and remarks Executive the Executive

Jim Petcoff

me Nick, calls, I'll will provide with on Nick Also, strategy, underwriting everyone. with morning, today Good our our second then and continued topline Brian. particularly our We most Like see coming discuss our Harold Brian. growth in are update encouraged business were will a to cover of financials. brief Thanks detail, results and Harold premium business. profitable previous of quarter, greater the from lines

the premium core Our remains premium combination see specialty that growth specialty high our of are Generally, rate a we growth in in account lines. solid for runway a additional increases, excelling. we retention markets significant

to to second pleased to expense In In ratio, we improved growth, short-term also goal expense addition premium are to improve. ratio the the continued trend quarter. expense the come as for XX we quarter, continues achieved and our first our management of sub the see expense fruition, initiatives

We of year, drive expect we ratio expense efforts and to XX%. these down the revised further expense for ratio the near-term to goal balance our

stem increasing In considerably structure, in also experiencing. efforts profitably, dramatically realize to ultimates been While and overall reserve expense future quarter. placing development within a premium to we've strengthened reserves our by need in reasonable that view the addition quarter. we We profitable to the tide of expense of the the we in bolster development, the continues we position our significant to growth is rationalize, to measures growing topline ratio second took mitigate reserve the

lines As business. mix, refine to we future business development a to our residual and burden of continue mitigating the as we any emphasized remain shed tighten the committed result, and firmly

business. seen we've our to improved book the more feel we business Given in date our go-forward from mix, confident ever performance than of

corner. is profitability underwriting the fact, the In around right

for initiatives ratio With generate it from improvement. leadership our sustained on all executive that, we loss to to positive a are on me number ultimately let energy achieving initiatives Nick and teams teams, other expense leadership have development of toward clear to mitigating tremendous - color turn results, management over profit. daily management combat Our bearing a and angles These more see path concentrated the and and end.

Nick Petcoff

we topline growth up written over second Jim our trend the pleased million quarter. premium to As continue, were see gross noted, in $XX to with X%

strong solely Continued premium a very lines on trend profitable our core business. focused of

second solid by small book premiums Commercial the In gross across XX% gross commercial our written but business specifically from specialty driven the E&S our growth group. trend. total lines, part which million from quarter, general, premiums lines in in the up fact, This of to largely in $XX rate the much in products. were quarter upward continuing sustained demonstrated was came of in X%

COVID-driven business commercial previous levels. as opportunities expand New submissions continued from increased to

addition to further high refine and favorable new been for still business, XX%, are benefiting In has with each retention us from now, renewal levels which constant time existing around to we our and some a allows renewal. book underwrite

lines increase base, specialty to our selectively continue Michigan. deeper our premium share and like As geographies State reach in market we home expand we our core key of into

at of total In written fact, Michigan XX% of XXXX. sizeable a continues to premium account in gross premiums of the percentage for our second quarter

we will on on business our roughly lines lines of outcomes Personal which are gross in plenty geographies, performance. focus Michigan, for lines, represents favorable in forward. production of Michigan low-value Oklahoma. and million best in and yet we with and business see consist in markets with XX% of underwriting products, growth we expansion generated overall a niche as markets premiums, geographies lines expanding share written characteristics presence going of at result commercial State. The and sustained believe share represented solid the growth continued principally business to market see consistently opportunities We quarter. in the dwelling has in the we reported other well-dispersed, for us, While room that of geographically XX% Personal such pleased growing $X a positive the for Texas focus favorable better increase personal

positions expand, claims future of exposure. selectively much strengthening focused and our grow and collective our reducing singularly to remains continues topline the effort While reserve on

We potential that In mitigating on favorable development focus light, and initiatives trends. pleased reserve we case future are strengthening continuing development. through appropriate, focused wherever future claims continue to to see through targeted to limit

For were from ago, in XXXX. XXXX, example, XX% the claims XX% down period QX a and from down XXXX from in year down same QX total XX%

For down quick of open restaurants in second service particular, same claims quarter down XX% from down XXXX, in the are and from the XXXX. XX% QX XXXX, from period XX%

we continue claims to to I anticipate discuss reserve these bear will Harold trends emerge applicable now call As strengthening financials. time. less With over and over efforts the to development tune the out, our that,

Harold Meloche

$XX was quarter, strengthening me, results. of encourage the on the I gross our Conifer's combined for in filings greater ratio our Nick. to and to I moved significantly in estimates the year, With detailed and as investors and increased Thank XXX% quarter, X% second and in we the XXXX last excuse ultimates our premium underwriting having the second million. XXX% you, on the quick by presentation years I'll by compared provide accident review premiums $X.X period impacted quarter, reserve up same focus Nick will the website largely Jim review for company's prior results, outbreak In million. to - written a detail. breakout, for

XX% reserve XXXX. loss second XX% in quarter to Our ratio year XXXX. strengthening lines combined the largely quarter accident on XX% XX%, were period. second the while Overall, prior the period current second loss unchanged of quarter, in last same personal ratio year, loss our the commercial ratio the year XX% ratio compared XX% was in efforts was The compared of was where lines to for focused, was the the from much of

to continued basis XX% with improvement points our down expense Accordingly, XX% our compared resulting just additional earned efforts, the to we expense this ratio, expense from reduction to premium XXX ongoing see to improved Moving last same ratio year. quarter, period over for net growth. coupled

ratio the As recorded million believe management we realized well. income is second second and while through loss efficient $X.X we quarter, $X.X was gain a period, the company year the during as to compared the with the expense moving cost to initiatives, net realized a forward prior investment sustainable period. investment in net the improvement year of Net of quarter, million in continue compared drive prior $XXX,XXX for year the $XXX,XXX

$XXX,XXX of in second securities recorded equity quarter. We a the value also fair in increase

to for reserves strengthen $X.XX remain loss years, second and X.X vast an prior majority in with million period, per the of compared credit reported securities fixed duration about with yield efforts income tax of or in X.XX average net impacted managed, $X.X average investments income equivalent by of $X.X per the in year period. to an million our largely a net of quarter, a conservatively the quality the Our of company or Overall, share share the AA, X.X%.

$X.XX $X.X million or $X.X operating operating This compared per quarter, the reported an of period per an same Conifer or to share loss XXXX. in adjusted loss of for adjusted $X.XX share, million

were sheet, turn Jim per a like reflected it equity to with assets to share, and cash the full Inclusive was at I'd over balance for of and of $XXX assets to quarter we total board-raised not valuation to that, quarter million. of the back our $X.XX have total share due And $X.XX remarks. per $XXX tax end, deferred end, net value to subsequent closing Moving million was book allowance, investments in with that value. book

Jim Petcoff

sustained reserve the right expense these position. positive work strategies certainly hard the am I'm confident ahead, achievements the addressing in our today fully in and we In see took reserve by ‘XX. we've direction, balance the we're the most to business, of we I Based continued reductions. more profitable ongoing our from topline growth expect moving of in and I results lines position, on the some encouraged strengthen achieved to for quarter, steps towards And have while of

be we'll if anybody willing any them. has take Now, to questions,

Operator

[Operator Instructions]. ahead. from Newsome Sandler. And go Paul the come will Piper Please from first question

Paul Newsome

about morning. we ratio you substantial talk is history combined was reserve process of higher fairly than steady. year what you call. Good the increases, ratio loss it for we'll or for the accident I the company. the see an when accident previously also fairly trend Typically, that could the increase loss year current essentially Thanks the for but I kept think because kind current hoping expected, was suggests see setting

of things? you flat. if those you’d So, offsetting others ratio talk through - I basically are year of accident some that there was other combined the offsetting And kind to keep factors wondering allows

Jim Petcoff

have, do is of it's XXXX and XXXX, our that we from at in we we we service the we in been have. all quite And restaurants, premium that What XXXX, markedly unpleasant, mix of of okay? extremely through was and the that specifically and question. business of of every XX%, is is our XXXX. from even than book. has which, XXXX, good QSR basically Michigan, a XXXX, take is years. The That's different mix XXXX of has to expectations historical year. had look books earned the those going business that business XX% zero look trends And to a business, and business quick Paul. frankly, the the insignificant grown down coming outperforming Thanks, where The

it take with from, So, that of earned picking paint premium, a we're when the is the the gone, look giving we're them. that's coming loss the consistent and where us and most books you ratios are are and historical it's results, at how were picks the having, business

Paul Newsome

could view you're or Thank we a And would follow-on loss other have make CPI today? really book at of you're of any look should can at that, square kind a you you trends contrast business it we how you. with today, And if helpful. be the the for do writing with just as it maybe just to book data that looking the on either

Jim Petcoff

total and of to today, in business better forward going it last yes, me Well, quite on our of And we it's seem or with instead that talking, you goals Nick? just want book level. of have the been achievable do performing take XX

Nick Petcoff

we're of book, terms that seeing we in inflationary the in mean, I mean, property particular. seeing I Yes. in are Sure. trends certainly impacts on loss

on We in actually an July. property. the rate had if you months, three are getting And of last we acceleration rate look at

changes books It's that line seeing we're of certainly, with, had impact. in Jim in we're ahead year. book we So, numbers and to in lot believe the this throughout that business. property. one the mentioned, getting we are some this significant noise, that our of in a the the there's keeping clear seeing casualty, little not of increase of bit physical of the less But auto personal inflationary up damage the a of with I if on even definitely two some property, see, have a CPI pretty we rate as earlier And more We'll side, the rest of year. business of

from So, it's stay ahead on that cognizant to it that rates We're of. side monitoring certainly perspective. of adjusting property something we're the and

Jim Petcoff

in add, where for, I'd of for are And going. reinsurance think, a I headwinds the costs also like costs companies bite are but out us are taking to bigger specific, reinsurance premium. in general, obviously

with have in you make addition increases So, to to rate that up CPI. the

of say CAT increase. our at that's CAT XXXX, we're of our in reinsurers our book tell reinsurance cycle. a CAT you of that ‘XX hopefully without tell losses year's, And coming we're expecting digit in last what ‘XX, change prior and the similar was even to I at in to with the pricing too If markedly you book losses historically the that would reinsurers, renewal XXXX, hoping our Also, outperforming the price. single-day and on look business the granular, been small after we're let’s the trend look on going overpaying that very world I the would obviously years. ceding - And rates, continues their probably were ’XX. upon to difficult our improve for this those you we've with that

that's ratio, we as as loss the premium. more ratio we get help not more a the expense down on way ratio, get if to So, the expense drive can -

from looking at just So, said, costs to increased that for coming as but we're the the CPI, and us Nick rate are reinsurance. not also

Paul Newsome

and Great. Appreciate Thank answers you the for help. it.

Operator

like This I session. instructions]. remarks. to concludes turn over question-and-answer Jim [Operator for back conference any the closing our Petcoff would to

Jim Petcoff

to remarks take by end do steps We the significant for quarter we expect year. the I that Well, are so profits growth. we some tough conservatively the and positioned it closing had a was only future underwriting have, of

So, and thanks appreciate I to patience. everybody, everybody's

Operator

Thank now attending today's And for thank you, concluded. presentation. conference has sir. The you

now disconnect. may You

Conifer (CNFR) 11 Aug 222022 Q2 Earnings call transcript