Earnings call transcript Q2 2023

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Operator

Greetings. Welcome to the Reliance Global Second Quarter 2023 Financial Results and Business Update Conference 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 this conference is being recorded.

the to turn Ayvas, host, now Relations. Investor will conference your over Ted I

begin. may You

Theodore Ayvas

conference Holly. you, Reliance quarter business XXXX joining and Global second update and results Thank financial afternoon Group's Good thank call. you for

Reliance. On Insurtech the Ezra and Officer Joel Executive Reliance; Chief of of Group; Moshe today Operations Reliance; of Director Global Senior Chief and Beyman, Operations Vice Reliance President Chairman Officer Markovits, with call us at are Financial of Grant Fishman, Barra, at

the its XXXX. three press the announced today, months ended release on the Earlier results for company operating posted www.relianceglobalgroup.com. June The company's XX, website, is

company's company In as SEC's the at Exchange the XX-Q today, well with www.sec.gov. quarterly U.S. website has addition, the report Commission on be Form website filed its also which as and Securities could the on accessed

you the (XXX) If information additional call any Communications the at Crescendo after have like XXX-XXXX. or any would questions company, contact please about

statements Beyman June reviews company's Mr. may for we other conference results statements. of of position, and in remind historical that contain are operating operations to than XXXX, and including forward-looking conference call for forward-looking All strategy expectations like this and XX, Before everyone future operations plans our financial future our statements quarter statements. facts ended the the statements regarding call contained results would this

results financial trends in could, words affect will, objectives The expectations other These events on business short-term based and projections words of are anticipate, to estimate, current of that may, its terms of identify about seek, likely, needs. believes are continue, and intended and in strategy, should, and largely design and long-term statements it forward-looking operations, operations statements. intend, may expect, and financial condition, might, project, company's future plan, the similar negative forward-looking such believe, expressions the terms

Because company's results of on in assumptions, U.S. materially These forward-looking XXXX. as may and and March Exchange adversely Securities and these statements. in and those events Commission to in filed from the conference could forward-looking differ are the discussed several subject this the uncertainties implied XX-K XX, call circumstances actual Form described and the or risks, forward-looking assumptions statements uncertainties risks, with and occur, not anticipated

upon You future forward-looking of events. rely as not statements predictions should

believes Although in it level cannot are company that the the forward-looking achievements. of statements reflected future the performance expectations guarantee or reasonable, activity, results,

nor addition, any responsibility other assumes any the neither of for completeness company statements. the accuracy person In of these and forward-looking

in statements to by duty forward-looking made cautionary well statements to any these this of update all evaluate their entirety risks conference forward-looking made All uncertainties. others the and statements. disclaims these company expressly as as are in the statements The attributable context of We these forward-looking by qualified any company company should call. the in

Beyman, over Ezra Chairman Having the like Chief said Group. Reliance turn Officer to now call to of that, and Global Executive Ezra? I'd

Ezra Beyman

Thank everyone us joining you, Good Ted. afternoon, today. for and thanks for

in April pleased important to report the the Barra that & grew same of to of XX% are of XXXX. which note we compared Associates We XXXX, reflects business. growth revenue primarily period the organic It's that acquired our to

of two periods. both our second had we revenues reflected were last the So of full acquisitions in in all for revenue other and our quarter of months year

Exchange have our months as six investments Exchange offers in experienced the unique loss more increase significant Exchange, supporting Exchange, despite the in value Barra view agency first partners, rebranding than RELI the beginning stems of company's of RELI RELI from This of are the plan the year. Exchange XXXX period insurance over representing reduced over in agency XX% Since since to long-term its with continues XXXX. progress achievement by RELI acquisition independent of our from agents. pleased a growth as core the to XXX% to the extremely And operations currently and we growth strategic and We date. expand, proposition network. RELI XXX same steady that the we

a By for toolbox also businesses, national most provides leveraging not their compete them them allowing surpass and the recent to larger only technologies their with independent capabilities, against the AI comprehensive offerings. services agencies, and platform but in agents

how now over drivers view would turn Reliance to like and I growth market an to Grant Barra, Vice overview Global in Operations, industry. call provide Grant? President the the Senior to opportunities of at of our we

Grant Barra

agents U.S. insurance U.S. expected this are industry market XX% onto them licensed global being XX% XXX,XXX to of all of is market insurance that $X.X approximately XX% the are total of Serving is XXXX, sizable. insurance by XX% these That's to recruit grow is It agents, the strategy Ezra, will nearly current trillion, more of agents. and platform. Thanks, listeners. by the $X.X independent which approximately being other is total that value than the The insurance agents. good XX%, of U.S. market market. for many our afternoon independent comprised The accounts the captive and the our Of trillion. reaching

carriers this overwhelmingly expected been are business ability but the only market we've with share. also positive. gaining offerings. to we offering winning Exchange RELI them to by particular a is overall is the captive receiving overall much the to same are the to been Not the or that that from group become our XX% our grow. on carrier, focused either more market feedback attractive with partners away, the has captive them But amongst At recruit independent The agency controlled simply goal time, –

a forms growing health, insurance. aging So there for of and are several growth, an other factors driving demand casualty property, and this including population

opposed more agency, our premiums, Customers who agents important to sell an the replacing can ones offer more the as alternative customers exposure quotes contrary, through competitive risk value one inflation likely the the much note To to that carriers. affect options, single and seek with it's the do same carrier. best as that as we're get also alternative rising often policies exactly captive price. are premiums we with only policies their Also, how not increasing pricing existing greater positively a from at independent So agencies to have That's margins. positioned.

In average the a our only their for of a the quote-to-close allows to within selection the contrast, best It suit needs. platform quotes makes but getting agent fact, very for agents wide minutes. to captive that customers across not carriers specific very In reason. also compare low are sure offering price best ratio

a the As RELI value to consumers. for Exchange agents offer is believe in and perfectly result, positioned both market real the we

brand. the of provide access many that market, major maintain individual own both even allow of mentorship the as insurance We start-up As but carriers continues in discussed interactive RELI on mentorship independent we we've And long their provide and day and they're and one. agencies, only can Exchange to in their allows as with website agents in with Exchange. to their them not also we the the RELI professional past, them support

they So that in the is more mean their drive and more they puts switching We This our are The is what it of players into position. on them they their competitive compete biggest why simple. The some immediately revenue company. can platform are to partners more to our our with When more Exchange. agents offer clients does to our faster, in that industry. them easier. results and more conduct It's agency, answer to the in a RELI are more business start premiums of against more opportunity. agency able able business, way

consolidate plans over I our to like the Fishman, operating would Moshe now and review turn Operations; to of subsidiaries future. to the Director them to call Moshe? Insurtech and in

Moshe Fishman

Thanks, Grant, afternoon. good and

to designed consolidate the take is of look discussing Before plan, at like our efficiencies current strength to single to our I underway, a each operating firm, our one firm agencies of would stand-alone wholly-owned well which a offices. and quickly have

provides provides insurance. across United of in all insurance and Services Insurance XX health operates group Fortman Altruis and lines States. the states individual

and respected Employee Montana Center health customers. amongst provides is clients. insurance Southwest group provide market government to group very health Solutions middle Benefits Insurance

U.S. lastly, insurance. provides our RELI partner and agency provides across transportation distribution insurance, J.P. and agency Exchange insurance the line health group exclusive United health specialty UIS Benefits individual provides And States. platform. Kush Alliance Associates individual network and

across very an now and million So you have an producing very Collectively, estimated these total agencies a see, range have insurance management, as policies active $XXX a presence. X,XXX of estimated broad we XX,XXX agents with capabilities nationwide category, than wide can strong representing have more premiums. we of under

volume. Reliance bonus improve company ahead, process anticipate with the throughout market brand operational we all Group, Group's the in immediately single States our advantages considerable of consolidation the uniting with consolidation brand under United Looking Global the of and are merging stand-alone Furthermore, one to will across under a and Global By the due our carriers increased lines structures be is efficiencies. expected of to furnish business, that enhanced. will this Reliance commissions agencies presence we the

greater will utilization also their respective our talent It insurance cross-selling foster the of effective and more opportunities across organization enable specialties. with

the persist in consider simultaneously our presence future, model we a we in believe RELI our strong performance for the the to With long-term scalable now across be we of organic growth growth. immediate built and across and sustained what us United deepen behind laying well and as substantial the groundwork while success subsidiaries, investment consistent Exchange our have for the positioned majority are we States, operating effectively highly business of we

returns confidence ability and shareholders. our gives to unique in for tremendous significant cost-effective Our strategic, market approach generate long-term the to us our

would Global, call results will to XX, now Joel? Officer over turn financial who ended quarter the review Reliance June I Markovits, Joel Financial like the to the of Chief for XXXX.

Joel Markovits

Super ended share revenue XXXX. was our are million, all. It's approximates. months today. respectively. for Thanks, presented good the June and three for to quarter with Moshe, afternoon second to be Company's financial excited XXXX, Figures million six $X.X $X.X you here and results great and of the

three in the from months, represents $X.X this year. increase million XX% the a For previous

For year. from a million months, represents the $X.X in XX% increase the six this previous

the $XXX,XXX X% period prior behind positive revenue. Ezra job operating only XXXX, great presenting in for XX% increased from the three same in ended Total topline year, months revenue the did a and increases. the by increase expense the XX, or movement a these June notwithstanding team

by ended This these total topline demonstrated months the which operating expense illustrates company decreased six incorporated, has are increase results. financial notwithstanding in X%, a enhanced the efficiencies revenue. in June For XX% XXXX, the

loss balance from a million increased due of or the for same XXXX, the three operations XX, or the sheet $XX,XXX as XXXX, XXX% six XX, where year, that operations months of Working XX% million. our decreased unrealized was six or million, for healthy ended significant derivative three by $X.X was months liabilities to in capital from by the June loss X% December the from months in X.Xx. income outdo Net ended which $X.X and by XX, recur $X.X was in XX, assets and June Loss In did prior June $X.X positions, gains million close This respectively. whereas to current for current modest XXXX. net not the by there valuation represents increased XXXX. a XXXX period

With prepared kindly this, Happy we conclude answer lines. comments our questions any participants or open may the have. Operator, to remarks.

Operator

At question-and-answer a Instructions] today this conducting session. is from question we Mike will first Albanese for EF be [Operator coming Certainly. Hutton. time Your with

Michael Albanese

agency uptick Hey, I my of Can just question. in to for Could the, a as just the rebranding. volumes through kind and of bit. consolidation result a just of bit? a Thanks kind is kind dissect you little I taking guys. regarding what that guess, your the you walk us how or expectation want commissions dive of into

Moshe Fishman

Mike. you, It's speaking. Thank Moshe Sure. Fishman

based relationships carrier loss of open also come not ratios. have, a commission, but that you bargaining carrier, have first business the bigger different power the when do better With on a for book you up particular only to on we bonuses the with better you

So besides brings. the new the should the before simple more consolidation of benefits even with that immediately consolidation enhance the business, writing revenue it

Michael Albanese

Got Thank you. it.

producing milestone? that of kind Okay. And how cash just guess I of only, flow. positive your of from What do on regarding you reaching here? reaching just then kind there inflection that is get expectation point

Ezra Beyman

options, with produce that one. being the doesn't that, line. organic it's the one is growth actually I to that and much, only acquisition in and in as on actually the we're as long-term. point Hi, That probability consolidation ways. up, on we're acquisition was the the Ezra going focused talking after mean now combined Moshe should yet positive. well of business It and Fishman enough is this it's willing picking we're already organic looking we're agents underway. but cash Anyway, bring various not about over day any close all And helps. breakeven And streamlining us the God quarter reflect Two away at Beyman. from

think I very components healthy, should these all So profitable combined operation. be a

Michael Albanese

my Thank you. it. just Got And question. then last

your said can give maybe XXX have us about up rate platform. in year the or remarks, I prepared of color end for like mean, growth were a some you the maybe just about that your significantly. on agencies additional you it, platform call is, scaling the on expectations think the how I you what thinking you're number or monthly

Ezra Beyman

Grant, think, ballpark. your in I that's

Grant Barra

Yes. This is Grant Barra.

ahead Let and that me question. go take

partner And is way of – there's of best the that network target the So candidate is two targets, that core the agency pools the focus happens organization. the results. really growth drive drive that, two markets, prospect we find a

our agent aspire prospect industry first going to is to for an independent individual their owner time own most works pools to agency. an and or what as be captive in that insurance they an The a have agents or agency

relationships how them a existing opportunities that new will in them new quote to have have generate that and place. who they system have and process individuals experienced to dialed-in are the existing allow in in very clients These

are owners. group second captive agency The

So captive that are dialed process. new are owners agency insurance very also business in these are with And are carrier. individuals these that single a

platform. opportunities at their they're allow to through existing developing them that So good very quote

sorry, solution low a very them very end is and as often to be the hovers carrier the agency Now clients. in field a that are single the in only a these field very single really able offer I'm only offer to in able That to does partners the circumstances, in limiting allow agency rates many these are owners – teens. of not these for competitive

So by lower rates. They new a the prospecting agency to same at bringing existing are able continue prospect already established they that business onto partners platform. proven our immediately successful close and those process have and

of faster, all them on the have be existing more also them they technology the our more to order much that to and those allows because give increasing variety of allows to much from carrier efficient our And new It platform business clients. close wide opportunities the the all instantly end much information of that relations. in to rates process to the different carriers accurate number

are these tremendous So benefits.

having offering agency insurance have through of independent industry captive who directors in court We our continue and them them these transitioning agency our partner the sales agency team or our or help grow to coming from being understand the advantages with RELI in and an their independent the working own captive and agents experience as agency of through and courting from Exchange. of for industry over transitioning in agent partner to office an owner to

If detail, you'd like go any additional questions. me to please ask more into

Michael Albanese

Sure. great No, appreciate I it. that's all context.

in mean growth? I So mean It I the win-win. what's I good agents as XXX guess agents expectation I well. RELI for value you it's XXX% obviously, expect just and time. help growth with proposition, short I specifically terms then perspective I a what think for maybe or the Exchange, unsustainable to there? perspective the some like maybe mean, is on at XXX% sustainable platform. QX. I moving is your of seems some I amount for then up mean, just and rate of to a this I'm over both Can trying regarding grew you just from think customers growth in provide come can forward,

Grant Barra

Yes.

some color add me around Let that.

value want for there efforts that choose going for able are said, can just to significant that the to to, at benefits to bring most a believe themselves the agencies platform business So on to. focus drive drive to opportunities and into both provides With about any we their revenue organization. clip many we being into chose close and agencies. our if I we in to grow there's we who mean that that RELI Exchange do agents I them out

And spending system So the to going who time we sure agents are of experience, to have activity, attitude individual individuals prioritize a are we their potentially and our make past of work drive rating to going field. their with want with every revenue. most that we these majority based the we're the in on a their we

because to So agency going remain up, this than believe to not continued our our do will more where believe I we've partners slow XXX ramp while stable pace is current too increase. added we've recruiting I actually year

So premium we the that that volume the brought company. our With next increase as able that will over we'll we the significantly significantly bring we number on we've will, period, in stronger said, the more return on. individuals dialed same though, process and are to into we've be

on more to basis. individual going they're earn Ultimately, an

I into to is little So wanted individuals. – go individuals our why the on detail on on is focus our these focus a why

partners rate growth experienced be will agency the a basis. XX-plus on So monthly

Michael Albanese

it. Got

this And then on understand mean, higher them if of put Okay. that. just Right. the unit being a Is better data. agent these I on I you think But unit, of should the be platform, the to you you expectation? conversion essentially moving a kind that's forward. only level about so fair that revenues say per have here agents, a many that take you mean, kind unit higher I quarters like driving of basis, meaning rate.

Grant Barra

that's to fair say. No,

after they they're Those also those not going revenues go take into for the be basis, year. So like you to produce a It's unit that need revenues higher consideration that away. revenues but themselves. continue to driving year per on revenues one renew to year

previous So a retain. efforts stack year of two, business all of XX-plus And years upwards put four, we're premiums to percent. business that retention new any year additional new that in three, estimate I'd top the of on able year those are ratio in from

Michael Albanese

it. Got

Okay. Great. for guys. today. really me my for question helpful It’s answering Thanks

Operator

Forest Capital. at [Operator Instructions] from Your is next coming today question Pincus Nick for

Unidentified Analyst

quarter. taking for another my Thanks on call. solid Congrats

second already recruiting that finding independent? You once recruit captive the from my to easier about it response. agencies? is, part the to agents earlier you that more gotten in Or actually agents are part they're your talk onboarded can are you've the question is you the network? feedback of And But answered from talent the success

Grant Barra

So Barra. this Grant is

me jump this again. Let on one

We platforms. are more from agents captive coming finding with success exponentially

the to agents restricted So platforms what able on offer end are captive they're these in clients.

So they're going just access carrier. carrier they best the everyone. clients. always always there's have the circumstances – solution is And it's Unfortunately, are, their to for going matter have It no them that provide to available one client's to. they the solution solution, what be one the best to doesn't work that that for

in is agencies. future The independent

captive ultra-competitive independent clip premiums the Now continue organization they agencies lose Exchange mean, past a to agents RELI are the at same in did they their the eyes like I to to if they the as grow make change, in even the want to field, these or have open, faster.

take able move we a that new significantly them agent in, process already prospecting absolutely able So our dialed close captive have over ratio. who when we're to and to higher business a it's can platform, has instantaneous to they're the

when Now multiple I'm significantly they're I talking of coming say ratio, close a higher where from.

insurance limitations are idea captive industry to I most in So even organization in quote they're joined along and feedback captive not that is the industry, But we're independent place, write scale of very, agents business wish exists. of close opportunity entering when scale but agency bring only I reality – and the to is lot have their the able insurance agents, the and in no feedback these out is getting lines a our that their the times, independent. amount that from I write business ability an as of start high. that new a of to The why didn't they're very because never the

in sales why the of team we have That's directors place.

which essentially these I RELI and the their can good. from become manage good, independent their we that existing Exchange So individuals situation, court answers to which question. is hope makes very them platform, outreach, your situation on educate that

Unidentified Analyst

Thanks. Definitely.

a The model. platform? agents other like onboard part you of your it the to is very onto cost talk Can it seems scalable about the

Ezra Beyman

the call it start in place. nine Basically, XX, sales them part. about over technology is to now we you. have, I'm recruiters and going the excited that infrastructure or to is or directors in I Grant, place. And I'm hand we've just really, – we and think,

marketing here speaking, million nothing that direct-to-consumer to cost not it. the models It's are like we That's money literally from of spending increase. hundreds thousands we to going And when of the marketing. spending in, give almost bring dollars us of bring because We're part in business So money. nothing the for bank, agents business. relatively only to comes agents the money you beautiful their they almost of pay that

So a And ahead, ready that's Go been like, you everything Grant, beauty go for little on now you want the to year, a the now to sedan a elaborate, get not this to Grant. it. rocket of too a if world working in could last place, over go. we bad but trip. We've infrastructure from in to

Grant Barra

Ezra Barra. nail – the the so really Grant Ezra here. head hit this on is

the getting There's and from running, onboard as I'm any that, up We experiencing. incredibly But cost really are have which infrastructure and is fold able grow them sure do not bring to as existing that variable can we the place. costs point are our we time training this and on. today. there's An little to continue into fast. we people the we're as the and to can no no of in organization fast able the cost employees' setup of contract and to company to individual that

Unidentified Analyst

you. Thank great. That's

Operator

coming Your Private a from next Kramer, Investor. is question Emmanuel

Unidentified Analyst

Hey, good Thanks improvement. quarter morning. the for

for investment, due while The got suffering million recently a You have splits. reverse it got $X approved investors court it. been the about to you and

can You think participate you cash received. investors that in those

Ezra Beyman

we were something think part largest as be And not think enjoy of the far were little little at the a But will reverse I we patient. plan, a that's grow. the to them and as our do I'm And shareholder. will know bit the carry And way I really out individual benefit I'm by the and splits least well. investors patience can and to shareholder required but business. or disappointed I that we chose, –

millions of company put my money lot the a into So of besides. – and I own

the letting more holding the just money to that us business little a using more you're grow think have have I we patience. and out, So

have – big it before. now model just to I The scale mentioned works we time, like

the of that like great extravagant no best okay? crazy own. like private our a takes the down to we very use treat one it practical would be funds, earth, salaries, And this not So business, treating here offices,

we're have there So we're and delays, get you hitches it, Thank very confidence we'll much. quick. were some on running God that should and willing, but pretty way. there you the

Operator

have the over the question-and-answer And turn will call Ezra I now to reached session. the We end of for closing remarks.

Ezra Beyman

Take it yes. Joel,

Joel Markovits

is Joel. take this wrap and This Yes. I'll call the up.

of considerable Moshe business thank entire behalf business this and next on and in Ezra, appreciate growth outlook thrilled time, the your much about landscape. very Grant, We're you. Until of Reliance team, the So we participation update. the

Operator

Thank Thank your time. concludes conference, participation. this for may lines today's you your you. you and disconnect This at

Reliance Global (RELI) 10 Aug 232023 Q2 Earnings call transcript