Earnings call transcript Q4 2022

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Operator

Hello and welcome to Conifer Holdings’ Fourth Quarter 2022 Investor 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 today’s 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 fourth XXXX

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

results anticipated this including these due information, conference the and underlying impact please note various that with statements Before and with statements company statements uncertainties made and historical on the company’s in federal risks in to its the may economy we to its of and started, business. of get the associated forward-looking on results, and results the uncertainties within and call regard the except and risks the forward-looking and statements, statements may constitute COVID-XX the including to our Actual financial trends, forward-looking products business from operations subsidiaries. differ materially meaning our securities relating laws,

those obligation as revise forward-looking Conifer’s and including new of statements or reports. to as developments XX-K otherwise. time disclaims latest described with or the well As SEC, from filings our specifically Conifer result a subsequent to Form risks update any time in whether any information, future

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

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

Q&A session remarks a this We prepared management’s morning. after conduct will

I Executive and that, Executive call Petcoff, over Jim Chairman turn to Officer. will the With Co-Chief Jim?

James G. Petcoff

everyone. morning Good Brian. Thanks

of Harold in the XXXX. Nick we the full Joining as are review of me call today look and on year

remains In dedicated in achieving top to top report line, for structure XXXX. sustainable, light, Conifer. streamlined pleased that of focus to expense profit growth year Our I'm line and operating another

years, Over strides our significant the growing business. we to past make in have continued several organically

line XXXX, up importantly, more to and that our was While expanding growth more into in grow our lane know we verticals. staying discuss for and write continue that further what X% came roughly continued Nick will has as our top best, by key underwriting underwriting we later. to

grow grow heard about that underwriting but book, years, to us overtime. been our talk positive the it steps not to we've For profitably only we've taking

over reserve strengthen to drive addition increased the and line retentions, our years, and and case an efforts our we geographic All conditions, lead our to prove significant In we our well. book, and initiatives ratchet underwriting as with overall spread, rate have top continued profit. ratio. to operating reinsurance to ultimates and the enhancements to have position growth strengthen book, on expense the numerous executed In down enhancements, conjunction underwriting including general our tightened across improved up reserves the past lower several terms

or a posted to we our result, year, full date. expense the XX% best yearly As a for ratio performance

expect Keep forward. expense XX% expense go our as ratio continue successful mind lower. goal or initiatives We to savings in we remains those

our forward. two quarter, sustained drag. profitability we that specifically announced lingering with that strategic and in the with operating will been has effect consistent coming posted for are we Overall, us For the address line down, and near-term early of the headway. ratio, legacy results top reserve making ratio fourth largest the position we the fourth believe going To quarter, a to expense impediment expense so positively transactions stronger we definitely issue, XX% trending profit improved

for we cover certain years pay Holdings additional in position the Agency. purchase $XX assets Transfer bolster transaction for reserves LPT and To agreement reserve an overall execute MGA, Portfolio XXXX an forward. completed prior. to reserve or should going than the MGA allow us provide Venture costs agreement, and LPT with overall. monetize our the cost our to of support to QX, our We loss which position of asset ample That more reserves allowing development sale of strengthen upfront further agreement, our for the accident our provides year-end executed associated strengthen the Loss paid LPT adverse us to completed This million and further

pleased on years, line organic several made coupled top select see over outperformed. our enhancements underwriting of We that have have the are lines to consistently focus our narrowing considerable past we growth with business the

by We execution prior. throughout of reserve protect the action legacy plus the strengthening years are and the we reserve further to took drag year encouraged XXXX LPT for the against that

feel clearly factors now all income $X.XX that post or path more towards with we that X million in Given delivering to per quarter these more combined, than pleased we our on are consistent each day to are we confident net of the profitability a passes, share shareholders.

underwriting that will With give on Nick. color more results. Nick our

Nicholas J. Petcoff

noted, underwriting we to over time. profitability lead implemented changes the consistent over numerous will past we Jim believe As have that several years

verticals. a of As executing we result, strategy our key remain to narrowing our to committed specialty focus several underwriting

these our market efficiency, verticals, talent Our depth greater run also leverage select goal underwriting specialty deep allowing to is us and to allowing for penetration same in of lines. operating in better these

the group our for quarter. executed the was deliberately we in underwriting our the strategy commercial for Small quarter Yet commercial XX% production and million the lines significant flat quarter. roughly and small increase under Commercial business of the year as gross gross X% gross Overall premium quarter our the roughly from written both $XX.X slightly to and premium of quarter in business narrow was down written fourth just of for in the our The nicely was to premium focus. a total fourth up year. XX% lines for for year-end. for the premium lines fourth total continues the majority the written commercial quarter, with business was come

addition the we though to saw book flow underwriting huge premium, the are continues rate in to rate remains achieving rate geographic positively solid books. Even our solid quarter results. for Small underwriting a in year. factor and through increases increases commercial environment, delivering today's on our In favorable business mix and

we emphasized last the shedding to quarter, where commercial and in business jumps lines in the want when written up to exclude from showing we of total the growth Similar premium grow our calculation, warranted. unwanted premium gross areas where lines,

premium affected was our Further, continued unprofitable geographic we offerings tightening premium to general, product also but improvements in jurisdictions. as the select we Florida hospitality to continuing there. our underwriting example, additional For and are exited refine continued year by spread in deemphasize

other offerings reduced Florida We non business in largely the very a have been Restaurant/Tavern have the to Florida product focused writings in of in only of select part renewed. state. All northern book

Michigan. in we market our of are exposure Florida particular, geographies home While reducing to state share key to continue like in increase we

Our grocery and in XX% is since premium up the XXXX alone. state

In with all for making fact, of for than Florida up of XX% gross XXXX, XX%. premium accounted Premium overall, roughly less the written Michigan

focused this expect the as geographies refined possible continue We writing relentlessly of trend nationwide. best geographic on to we in business selection are

other favorable in of efforts will states or result inflation, our and demonstrably other focused growth going geographies. the forward, Midwest As profitable be like on costs a Michigan, in factors loss social

gross premium share business, million the XX% there. fourth continue achieving was perform Personalized and gross like geographic the are well for quarter-over-quarter quarter. we written almost Oklahoma we up to that the to Texas a and $X XX% of business products of of personal quarter. total premium Our which fourth at written principally consists low dwelling overall value continues lines for growing to represent spread

did In not terms of a will rate, rate Texas we be More recently retention budge. rate applicable in increase the coming ahead. in the put through rate days XX% and

We did led several the fires to of are book atypical results year general. that pleased last our overall, personal lines but by the we in large direction experience book for

runoff. As we service previous on restaurant into business our put calls, quick discussed we've

million service down of wrote For XXXX. XX% written high from all gross XXXX, of in premium we in quick restaurants, roughly point the $X

wrote XXXX, quick For million restaurants we literally fourth zero quarter for service the with XXXX. $X.X of premium written roughly in

the quick accident in XXXX for we Looking like mentioned XXXX restaurant corridor and have relates for through forward, keep approximately outstanding service years XXXX. we accident years prior. of it claims as remaining earlier, that are to that, mind through claims XX Jim Outside

In addition, that's severity. the overall, claims see to and frequency general premium trends per favorable we continue

greatly successive statistics years of are pleased in, line. are improved this fruition enhanced coming trend plans overall. All we by gratified claim geographic underwriting We into with and encouraged and the positive specific see to spread

turn Now we look with in forward to to Harold over financial financials. improved call performance seeing the forward. efforts reflected to the going I'll discuss that, those And our

Harold Meloche

just under break review fourth Nick greater written I results will Thank results. the million. filings to having Jim detail. on gross With underwriting the Nick. investors of I the our provide the focus presentation I'll premium X% review a encourage out, increased premiums to you, detailed quarter, our company's website for quick and In and $XX and on

was quarter ratio period in XXX% combined fourth same XXX% during last Conifer's year. the compared the to

As earlier, the of reserves to Hurricane significantly of the in quarter. loss with additional the and the LPT the action booked Ian required This strengthen company mentioned the impact corridor through steps combined our recurring to for the accident was year moving the took led elevation combined of XXX% Hurricane to impact the for expected the year fourth ratio quarter and are The full XXXX. ratio combined of excluding was not forward. quarter, XX% be and Ian for

due the of to compared XXXX. Our unusual items fourth this previously loss to ratio the in XXX% Again, was detailed. XX% was quarter

loss the fourth accident in much ratio Our the significant XX% XX%. impact where commercial ratio reserve quarter, excluding Ian, XXXX. Ian's the focused lines, was loss we activity In was the of and saw of where for of lines XXX%, Hurricane most the while ratio year the quarter impact personal was Hurricane loss was strengthening

earned compared ratio trajectory and same target prior year fourth expense the XX%. our The the period from for full quarter, to reduction down points XX% to last ratio the lower expense efforts. our continues XXXX year The XX% was of in ongoing the the basis ratio premiums XXX year despite expense our was ratio, to expense period. XX% approaching expense net Moving due success for of downward the

key As year throughout expect from we during fourth income period. XXXX. the Net the quarter in to net the of fourth the investment XXX% grow up during see continue net improve ratio investment in the $X.X expense million organically was net while in $X million earned prior of compared our income realized XXXX we premiums prior to was realized verticals, losses investment flat $XXX,XXX the period, to year quarter,

equity in the recorded quarter. $XX,XXX value in decrease fair also securities We the of fourth

years, income a conservatively quality a Our with loss of net fixed X.X of the of with for share $X.XX or investments prior $X.X the credit reported income average managed, plus, of an an Overall, tax and X.X%. remain AA majority duration average securities yield equivalent of share period. company million compared the a $XXX,XXX net $X.XX to in quarter per the or of year fourth per

This from million quarter share operating or Conifer $X.XX $X.XX adjusted to $X.X last of an operating per compared $XXX,XXX year. loss adjusted of loss share reported an or

with sheet, and were of balance million the cash $XXX total to Moving at $XXX assets total million. quarter-end investments

value share. per book was at Our quarter-end $X.XX

due were not have allowance like tax it We share a reflected net that, turn closing And in $X.XX deferred valuation to with to for assets to I'd per Jim back in value. full over remarks. that book

James G. Petcoff

to steps of by Harold our wants as far Portfolio reductions. accident strengthen I'm Based a And in key with we've in XXXX, historically in for profitable were focus question. Thanks, in now, the growth see year and expense purchase beyond. on prior especially as from the direction. underwriting the and expect on well the the of achieved the for so position, I hopefully, overall XXXX encouraged results XXXX, to I'm major fully our to right years verticals ongoing reserve there's Nick. and we moving We and took the Loss confident Transfer. successes outcomes continued balance to the ask that that Operator? further someone date

Operator

from we private Alright, question Tom Stewart, a Instructions]. [Operator investor. you. thank Yes, a have

Unidentified Analyst

you Good morning. hear Can me?

James G. Petcoff

I can.

Unidentified Analyst

Hello.

James G. Petcoff

you can us? Hi, hear

Unidentified Analyst

end I year. wondering got September you. coming There see was the the was this the September I plan for last And what towards a filed maturing in offering Yes, some notes X.XX% SX year? of you due of notes I are new and for an

James G. Petcoff

through or Well, to or taken in pay either and we'll or them And off. those of. hopefully other, get the renew quarter plans we're you'll them to two, care come do be next so have underway SX the seeing going one we more

Unidentified Analyst

much. very you Thank great. sounds That

Operator

Thank conclude you. the like Jim the session. for would return to And to closing Petcoff call question-and-answer I any does comments. this

James G. Petcoff

job prior, thank of transaction. but and we put finance lost very you. everybody I excellent accounting department, an appreciate portfolio the And call who's for the in and an And the an a on busy forward, development year getting to end. for getting have we're accounted to they did like business been been I closing on usually XXXX us that to we pleased having underwriting for transfer and we place, on It's the correct all look don't the compliment together are which as quarter, stop of the the million the operating this we've profit to reserves forward position. are in that reserve and and position puts XX a additional the really having. from going path confident

the you thank So call. being for on

Operator

Thank you. Thank The attending conference presentation. has you today's now concluded. for

may disconnect now You your lines.

Conifer (CNFR) 9 Mar 232022 Q4 Earnings call transcript