Earnings call transcript Q2 2023

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Operator

Good morning, everyone, and welcome to Conifer Holdings' Second Quarter 2023 Investor Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please also note, today's event is being recorded.

At this time, I'd like to turn the floor over to Brian Roney. ahead. go Please

Brian Roney

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

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

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

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

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

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

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

Jim Petcoff

quarter financial the to regard, today different in by you results. impact many Brian. wind-related In the felt you, second Good at than the industry us discuss for and today joining we on the peers. are everyone. me quarter. Thank large, joining no our Nick our morning, of call was are Thank Also Harold. events Like this

In it magnitude XX anywhere occurred. business, event lines almost affected fact, has an since this has years near the personal been

storm-related period, I'm pleased areas unusual of in in continued for losses several the progress Despite see the emphasis to Conifer. key

premiums example, achieve core growth the for rate gross profitable written six-month almost For coupled management. line growth top premium XX%. expense organic the the were top us allowed Significant written as gross this In period, Moreover, on business, growth. quarter, with up our and was to within well. up line substantial increases historically specialty year XX%

our provide played that but line solid growth. will more underwriting color recognize quarter six forward. growth and We It's see in going this a in important for is to room that role pivotal for Nick the expansion continued shortly, the strategy driving months. disciplined top

past we we have our the the verticals in have years, deep we and business, profitable emphasize key experience few focusing book on Over where of that lines most. knowledge diligently refined

accident year navigate underlying growth. to commitment the profitable reiterates ratio a the excellence quarter. is focused storm-related and combined second an our underwriting core strength our It ability and the Furthermore, while long-term losses, our to we when XX% isolate we of of of posted on remaining to operation impact for testament challenges

reduction. consistent our sustained and overall to on expense continues Additionally, demonstrating expense improvement ratio an trend favorably,

improvement our results as forward. of our the milestone a our We expense move XX%, overall profitability. company processes, significant control efficiency efforts we and that our for These to ratio affirm operational approaching and costs streamline to target enhancing position reflects commitment are near-term continued

with success. commitment emphasize entire for positioning to their to dedication market team. sustainable the are of vision, has our testament while work and hard take a these unwavering entire us our coupled Conifer facing to a to navigate complexities achievements the moment expertise, like Their industry I'd that our enabled to strategic

to I'll off for color now results. hand it more underwriting Nick on our

Nick Petcoff

Jim's have our to and the direction operational sustainable strategic that provide future profitability. shaped Echoing details that point additional objectives performance, regarding comments, the way I'll

years, Over where meticulous the have underwriting teams past competitive have to distinct a few our cultivating enhancement, dedicated our mix been business lines a we advantage.

By business track and core yielded we've gross lines of of experience written premium. aligned where profitability. the record knowledge, quarterly harnessing under This for underwriting of mark these million, we water high our experience own focusing a record on have efforts of $XX power a specialties, strategically proven data, with our strong approach premium just and extensive

a growth to of total gross XX% our earlier, from combination As a verticals. key premium organic increase of The and in written prior accounted achieved increases in rate majority of significant year the select to compared Jim premium This noted resulted sustained for from period. the gross come our operating we XX% which in increase period. lines, commercial just under continues premium written

up the X% to was $XX production lines million. in Commercial quarter

By business our factors. expertise and current attracted of we’ve approach use with in been where these to with and data-driven growth, has technology us market a Through analytics, behavior commercial patterns optimized identify growth at overall to while risk insights, selecting advanced This profitable aligns application comprehensively book. guided target our refine of our trends, strategic for in leveraging Our precision. XX%. we account efforts prudent underwriting consumer retention retaining particularly and the business solid data has can opportunities lines of useful book our examine quality lines market best

lines a total quarter. the same second of of personal products, at XX% premium Our up was business grow over which year XX% consists $XX million last just the over just written written second for premium principally to represent gross lines the share gross of dwelling Personal low-value overall for quarter. period under business, continues to solid and

the first losses, impact the lines for for the year. of of related XX% combined year was half XX% quarter Excluding the accident personal and ratio storm of second XXXX the

additional personal our lines our well. analytics rate significant efforts to rate more our price Oklahoma and in leveraging accurately proactive over effectively as lines we previous advanced to and production risk performance, focused and personal in on and premium earnings runway see noted additional significant We refine As in and continue time. in modeling increases Texas to growth increases calls, for

company’s ratio Excluding the management. losses, period year first the results. trend for second the a was XX% prior over year commitment effective It impact to continues quarter. prudent profitability of combined risk our quarter responsible pricing our the also improvement accident and storm unwavering given assessment, the This claims marks notable highlights and

As the expect The the consistent disciplined a trend lines dedicating to in resources emphasized corresponding to focus the Conifer’s see and downward we on has efficiency. continue strategic profitability. the for continues improve, sustainable and to will operating its overall of combined to ratio. long-term company profitability underwriting drive profile of growth performing business, company book By best overall

the With that, for I will Harold over to financials. the call turn

Harold Meloche

results a Nick. quick greater our the financial and presentation company’s of and website filings recap I you, to for I’ll investors Thank provide review detail. encourage on the

financial written XX% second and million overall will over the gross in our with I more $XX increased noted, Nick just quarter, the to focus on As premiums detailed results. premium having breakout,

period second year. still Conifer’s quarter, noted the was elevated combined storm down XXX%, overall For year the same last the excluding which the was accident storm earlier. ratio when And impact from considering the the ratio the activity, XX% XXX combined was in combined basis the as of points even ratio quarter activity

the was XX% of the quarter and half Our improved same XXX loss to the first storms, basis ratio period the XXX year given XXXX. basis points nonetheless points for in but last versus improved XX%

target quarter expense the XXX last XX% for down the was The of expense ratio ratio XX%. period same points approaching for and our basis year,

continues the earned ratio of reduction trend lower expense Our to downwards, favorably success to despite the premiums efforts. expense ongoing our net due

begin anticipated and organic time we verticals, the trend through net over downward As to to growth ratio our expense accordingly. premiums increase key to continue expect earned

up the XXX% and $X.X year for was the to $XXX,XXX the period. up income month from prior during was investment period, million million in Net $X.X quarter, XXX% six second

of tax Our AA+, of equivalent quality an remain of with managed average securities yield duration X.X average with years X.X%. vast income in investments fixed majority them a and credit conservatively of an the

million $X.X per year of $X.X in million share losses $X.XX a period. second net reported to storm loss of compared net With the $X.XX prior share of the or million loss or quarter, company the $X.X in a per

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

book end $X.XX share. deferred value. tax were reflected quarter was allowance have – We $X.XX to per not at valuation value X.X and in book share do a due full a assets Our net per that

back With that, it for like remarks. closing to over to turn I’d Jim

Jim Petcoff

to our Nick. superior in our are that emphasize to achieving our order and to operational closing, in Thanks, Harold. deliver growth Thanks, and commitment I resolute holders policy results want service to efficiency over time In sustainable to shareholders. we

move serve, in to to alert markets the in, such exhibited value the we we in and industry-wide we storm-related responding to our to all navigate as ability evolving efforts and shareholders. remain quarter, we As nimble deliver activity confident and forward, remain second challenges that the in long-term recognizing our

invite like I’d that, Operator? any you that to questions With have. may

Operator

comes Paul from ahead Newsome Please [Operator Instructions] from Our first question Sandler. go with today question. Piper your

Paul Newsome

between appears to for or there Is net premium, you function the on? else is just and Thanks about commercial? net. the that gross going the gross than of relationship the be purely faster morning. particularly talk the call. a in Good Could And the growing reassurance something

Jim Petcoff

Nick?

Nick Petcoff

property our from at reinsurance. a function given reinsurance year is last the see on X/X increases Ian. We that Yes, activity of did

that knot also the We our XOL have treaties, gross. reduces commission compared the also to ceding on so

Paul Newsome

sources small Right. believe. of talk I the and… about that There was a Can adverse development, amount we of

Nick Petcoff

tavern now our year. recent on our Yes, into from emergence runoff this restaurant year, mostly book we bar we’ve so which Florida, some did in see XXXX, put more

the that we last impact forward. ceded portfolio year. development put to don’t being a the we’ve rest moving that the of loss major transfer as And really was in see So place

Paul Newsome

about with the should perspectively business? load cat growth think How property Great. we the in the

Nick Petcoff

hurricane quarter if Texas less books for convective look performed business, last storm at we’re Yes. Oklahoma an seeing more well. a of of and of moved It books the severe of risk and to It’s unusually from coastal our was you moving those very a years where couple cats have exposure Both business. losses forward. active

had we year. last XX which think up – I second second in quarter, the from the smaller was significantly cat cats in events

this So, while us, think did an quarter. for do impact it anomaly it I was

rate book. XX% X/X, or effective actually increase a we rate increase implemented for filed for our we’ve – book XX% implemented X/X and a Oklahoma have being our a We’re Texas

as do active book quarter and QX a of more will our season more for think business. I So that opposed to Florida hurricane be had we

Harold Meloche

on follows rate increases states other of well. that And for as several those also previously both

Paul Newsome

more not second quarter of the an of think with it load on anomalous. everyone bit that stable general load is we the creating the agreed in really pretty historic of cat is rising? Should thinking Or expansion expected I'm cat a obviously, pretty based prospectively? like business – little Is patterns?

Nick Petcoff

from think expect could it's – in yes, to of second see second impact moving events books first say that forward we'd of the the because business. more I cat those you and quarter, reasonable

exposure. On of the most we flip our side, exited Florida

quarter the So in much expect hurricane to third as and we don't see fourth a perspective. from

it's cat but exposure in book the So to going business given yes, the of year, the of the based more for lack on it's in that those half the in Florida. states, active assume, with to reasonable be less second first half year of active

to the quarters different the parts last different of throughout of similar just year, the pretty probably different overall, parts in maybe calendar. or and – country So

Jim Petcoff

a from But perspective are the you for perspective of load asking rate? cat

Paul Newsome

but from really of building be might obviously of hard ratio going of the a losses looks sort And piece in that tell. to No, like – perspective. normal it from it's expectation up be year. going for a some it's combined average, kind are on to We

Jim Petcoff

Okay.

answered think I it. Nick

Paul Newsome

few And and the get those think expense improvements? you more then you maybe much a thoughts improvements ratio on more can how

Jim Petcoff

Harold Yes. where speak. This I – but to speak get where tell to gets will is Harold you… This is

Nick Petcoff

embraced laser-focused the very I have tell management you on us have and been do expense way encouraging are And Board active we coming sure that we line. That from and a expenses side. making standpoint, the total has that into been to our

Harold? So

Harold Meloche

in Well, quarter some of made had will seen that and expenses fourth not quarter include third won't and actually, going the until we be yes, as a of we be which quarter. this second expense some the the forward reductions that really result last that

efforts still ongoing will forward. future show benefit the moving quarters is there in more So that

to We some had a that estimates that expenses quarter relating we more for had to relating from quarter. expenses few also, we last particular the in year, had the transactions in year-end this were this of adjust to

a continued the number a see but next to should you put So that in in yes, you ratio reduction can it's actually basically on hard – quarter. see it, expense

Paul Newsome

you. Thank

Nick Petcoff

Paul. Thanks

Operator

we'll Petcoff any like session. over concluding today's turn ladies question-and-answer closing Jim that, floor I'd be to And back the to with and gentlemen, remarks. for

Jim Petcoff

call. Thanks for the it. on appreciate being We

forward have forward on and to initiatives We in will business next move look underlying confident you. we the Thank core quarter. continue to started. our We're

Operator

We Ladies and gentlemen, and time your for thank with that, you interest. joining. we appreciate

You lines. may now your disconnect

Conifer (CNFR) 10 Aug 232023 Q2 Earnings call transcript