MDWT - Earnings call transcript Q1 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello and welcome to today’s Midwest Holdings First Quarter 2022 Earnings Call. My name is Bailey. And I will be your moderator for today’s call. [Operator Instructions] I would now like to pass the conference over to Tom Bumbolow, Head of Business Development and Distribution. Tom, please go ahead.

Tom Bumbolow

morning. Good Midwest XXXX to call. first Holdings welcome earnings quarter And Development Head here This Bumbolow, Business and is Tom of Distribution at Midwest.

Joining our CEO, issued presentation will Yesterday financial today's earnings Midwest our XXXX its me evening QX announcing results. Georgette for Nicholas. release be

call, at this announcement, we ir.midwestholding.com. may of a page Relations reference the on found Investor will of today's copy which During be our website

you reflect more performance, which call with will XXXX items read encourage comprehensive we Commission. Exchange about this that and for Securities discussed the QX While document, has our financial information our also XX-Q filed XXXX to through within and both Form been XX-K Form

Before of assumptions. of as as based call goals undertake beliefs obligation performance, we our to matters financial These that revise forward-looking and on occur. will business the our from date result you developments reflect outlook, forward-looking which information operating management's we will and begin, and this current are call, today's no statements I new remind opinions this include that may related to statements of a

are subject that those results and and from other differ various cause our Forward-looking statements actual risks, could to today. described expected materially to uncertainties factors

significantly business a to of addition, are we In subject and risks impact that number results. may our financial

risk remind call, Midwest's measures cause discuss could differ more I would addressing website performance. where that you non-GAAP XX-K conference actual you Form once the to statements. section. the For be a QX under description again, of in from replay XX-Q Investor company's call our available factors materially will like a XXXX the and some XXXX Relations results we during factors, that our this of will A also will of on detailed please Form review our the discussion to see

in and find earnings QX Form GAAP XX-K. Form reconciliation to and XX-Q XXXX nearest historical XXXX of in release measures those You measures the our could the our comparable

Nicholas Georgette over call the turn to to results. share I'll Now our

Georgette Nicholas

on progress. Welcome you Midwest's I'll financial company's the for strategic forward. the the and cover earnings quarter We first quarter the an first to opportunity Tom. XXXX driving call. business Today, the growth, appreciate of results and Thanks, update joining for trends focus

action for relating During product and the foundational the and the to end first investing further We position written trends quarter. quarter second growth took in into to and in company at we quarter, capabilities. pricing, saw the encouraging of first the premiums technology

rates grow. fee We provided developing we are the in continue Overall, interest expand to capabilities on. for benefiting been from along us first revenue movements have continue quarter the service to to portfolio our saw in with base has investment our and a

maintain customer modern a focus on strong and indices and capital structures, for and opportunities technology. recurring risk capital growth capitalize administration use returns nimble to and experience. support technology our model. results supported Strategically, working business working business of without we for with our fee that a model including we're for aided create and growing processes investing customers. best-in-class striving marketplace. and higher and a the Midwest encumbers for services continue efficiency the allowing to the is strong provide support of our the reinsurance and we ourselves term. can technology allows product, those reinsurer, a including business to demographics, by result on and products We We working with quick combine capital which us partners. traditional provide improve and And leverage to of capabilities the And oriented market, invest and legacy and is flexible from designed in changing are others. Our that by quickly The for of while to distinguishing to revenue be positions to demand We're and mitigate leveraging long-term insurance now interest that the key company, stability to over around management the our customers drivers core captive finally, our reinsurance shareholders to by agent meet demands effectiveness enhance model, our to the vehicles. we're be to substantial those compared our us services longer outlook, a and in is us structures the industry time, provide reinsurance assets generating

Turning and our negative by the excluding first an reported increase of in of the fall reported for the million the net XXXX, this in we quarter. revenue, and prior and mark-to-market Overall, GAAP a This reported in $XXX,XXX due the from interest loss $XXX,XXX did last credited other work benefits up $X.X were net revenue technology to operating first and mark, feeding options to we and salaries in increased on in expenses embedded and with reported value investment to the initiatives. quarter. option amortization along value of results of compared We liabilities allowance. quarter build an benefits with revenue. Driving million year as first service quarter the year's and prior $X.X see quarter held business in were which total continue quarter. first results increased total the increase options processes of income negative in fee years’ in commission, million from Salaries in the compared $X.X million the for GAAP income was of our improvement increase reached $X.X the to expenses increase

area As an focus we to be and grow balance. expenses of managing continues

costs were the and to accounting Overall, annuity statutory bring $XXX.X year quarter written to a of the on premiums will of a We line progresses. first of direct take for first $XXX.X in $XX.X million quarter as quarter to steps the million compared fourth continue basis at XXXX million in the XXXX XXXX.

market. for market competitors in annuities the competition and with intense the see aggressive to to potential new enter pricing continue We expected

have first and say of quarter to we [indiscernible] $X.X to year. or in to in results and quarter the later XXXX compared actions start XXXX's more position. a on year. first first but competitive active XXXX. been encouraging was XX.X% slow million remain last to this filings or have second the XXXX, trends our this There quarter. have as $XX.X expect the these Overall, taking we seeing in maintain received additional in expansion of anticipate move State and quarter quarter applications we ceding in the $X.X into of first We priority the to with XX.X% million process in premium million $XX.X compared million efforts the of the quarter are and we Ceded actions positive

For GAAP over of the the purposes, policies. ceded commission is deferred and earned life

deferred sheet balance be As of there was March which will million gain on transactions, co-insurance in on $XX XX, revenue over recognized the under time.

of from invested the core Our benefiting $XXX products, end. year is million XX, assets mortgages and developed as which areas credit, approximately to portfolio capabilities from up of commercial overall of producing asset billion at Overall, to X.X%. base $X.X March grow in private structured at continues we're yield alternative source an

range grow the is reallocated to cede, state are our based expected guidance the to in of to and We expansion, by the on current other $XXX in expansion, average, influenced business XXXX of for million the commission generate that Anticipated with written million $XXX and is market. The IMO view goal personnel, on premiums capacity are of and be reaffirming initiatives. potential in XX% along to from capital. through our to manage to to fees we in reinsurers premium strong anticipated the written Demand potential XX% pipeline. the have have premium place in ceded the approximately partners transactions year cover existing

working full want a to to approximately take transition year the a million finance XXXX. I general are to team. management a bring $XX to the moment administrative expenses to be the and million We for $XX on address non-GAAP leadership basis, on measure,

Midwest also press and in in of As will at a Daniel related Finance and XX. reporting, noted CPA various experience AIG. Horace a the and than Health, on our of reporting, SEC background more joining in the XX Vice roles including Fidelity, as in Maloney years to Mann, Players insurance President is and American release, accounting companies worked has Accounting Dan Executive controllership. May with industry public He statutory has be

to excited a our he we team. believe strong to is have Midwest join very are We and addition Dan

of practices Berg financial interest both effective immediately. Officer, in regulatory accounting, And disclosed release There stepping be best that press we otherwise. mutual the felt This he President well, Financial also to We wish Eric or in forward. down was Midwest as that strategy, or relating Eric no will operations, disagreement was management, decision our Eric as our moves Chief a Senior matters, and Vice parties. policies, was and

performance of value for being pressure under through by that potential The being months. the price the growth transitioned the the in The to not the and few stock been Finally, value the business, we of business actions acknowledge market. continued the continues as platform. reflected last build we've is has taken

we Midwest As is growth. for strong positioning and committed the our at forward, continued is team opportunity move the business to

for it open I'll questions. up Now

Operator

first JMP your Securities. go Thank you. from comes ahead, Matthew, The Instructions] Carletti open. from [Operator question today please line Matthew now is

Matthew Carletti

you the how plays little go of should you may us quarter the morning. kind you're as that? late that color in much into we bit but a referenced of Good across play And kind that? maybe much influence about a could and production a things out how state you guidance market changes on, to for thanks. Georgette quarters some of that kind was dive year, more seeing, could particularly that reiterated Hey, expansion into talk how line of cadence three of hoping and you little the top in expect into, and we the provide I the little the remaining QX seeing, are of your you further

Georgette Nicholas

Sure. morning, Matt. for Thanks question. the Good

as quarter the consistent top saw somewhat first be we we with there. the we think I that fourth quarter think trends line, expected to about and

in that the surprise million for came So about $XX no quarter. we

took a in we During though, that quarter position. bit ensuring around competitive that of pricing were staying quite a we action

on of applications built process We've that and really be around think We've on will our out a couple be We got of brand is state into in to, name number resources allocating getting of distribution and also a active, and focus state And expansion. not ensure a our just of then there. path premium. partners the did lot those forthcoming. things continued again, more we expansion

kind of So of the half the that's year. back

our that continue Again, goes making from is a the I And to expectation grow is staying competitive we're that on. challenge is, sure big we it will bit perspective. year capabilities along as with that again think and our think, our what be a edge there what with able an rates have in capacity. to seeing with reinsurance we're little match of to that movement our continue we asset pricing to

on. goes year So, that we the we grow believe can as premium

So QX year expect I growth quarter trends coming out that we continue to that the progresses. again, some the to encouraging as saw then would of to see, first given the and grow

Matthew Carletti

guidance bit you warehousing for then ceding talk I moment. the kind XX% of or warehousing you and one of Can a before just about great. the for of and can more, And out Okay, little on think at you overall as average obviously how if XX% kind of it it like getting that a ideal looks about the your production, kind bit to year? sending size kind the to are

Georgette Nicholas

and really we transaction warehousing with Yes, SRCX we a it we back seen new sure and in in that ones, to making was in the capital have time a percentage, others the I pipeline we've about transaction. the year. perspective. from we have I first we're been as capacity to that this, kind reinsurers did of ceding is ORIX that's the a building half cover the and about potential at again, of that in existing as think, that the think our that the ensuring It's capacity, And, potential look really successful the

in ensure I growing as we're we It cost, us our capacity are to that important. but own size we finding have place. think that So be also allows growing is about the capabilities, thoughtful

a maybe little numbers expect So size bigger. would transactions, many us to bit as of see I not but

us also about streams thinking really what and ensuring managing we think a we're invest from it's and perspective can that I then in. for again capacity about ceding revenue commission

what will the So, kind low range. I think have some we've the And of we running we XX, with very that around been that pipeline think about in good that of increase. we end of feel

a XX I a sense timing warehousing market. them strategic and size about execute to kind discussion to for in really think becomes the of the of makes that growing us

Matthew Carletti

you Okay. the makes much answers. That Thank sense. very for

Georgette Nicholas

No, thanks, Matt.

Operator

go please Sandler. The Barnidge now today you. from line Thank open. question is John, next John ahead from comes your Piper

John Barnidge

to is rose number revenue fee about? a $X.X run any thinking Service million one should we you. from items that ago. or Thank year there be rate $XXX,XXX time Are there a

Georgette Nicholas

John. Good thanks morning. No,

be revenue fee service think strong I continues for to us.

And see assets Some and as is we generating management revenue of as is that we that recurring grow. encouraging which a noted, to under stream. continue that's nice continue to

structure support transactions, investment I that think reinsurers around quite we've is. I building bit of addition kind relates we've to some to to to vehicles were generate team is I able leverage fees begin structure, to around the been credit, – of source looking with we guess, in at our capability those that to trials, been And where really of, would a that somebody in really additional private say, the some to been and able we've fees assets capabilities that. or there

in revenue stream. the line assets is main focus under potential think management that of we But So to kind growth. grow to that continue that's

John Barnidge

Okay, very hard follow-up, your another commercial that Georgette. are loans great. much what's please? loans, these your sheet, and typical for are in yield you then And they mortgage money Thank balance the

Georgette Nicholas

Yes, quality rental those, of collateral again, based low rental right. a or of A partners. them as about commercial loan-to-value good are but by of again, they getting collateral supported we about by that's lot feel strong vehicles think supported the lot the vary,

quality in they that long potential what's through established and the of is volatility located. understand that ensuring again, are that credit we the that stressing history again, We go around again, markets certainly So ensuring a happening that and the and strong. process

that those assets well those, again, diversifying of commercial ensure the as vehicle the to be we're may that and looking type are they around we geography So as in.

So to that's I on we X.X% kind return, think X% higher, at depending of structure. as in look running again, probably sometimes the somewhere

John Barnidge

Okay. in much maybe Can more. back That's fantastic. total capital how talk is reinsurance And about sales please? maybe you the one

Georgette Nicholas

Yes.

the the portion see I taking in reinsurers, the for can some Q if of the again, that again that the of look think we're K So and at look we're if book for fees that we and right at disclosed retained that's you managing – assets it. the you holding

kind me, look my here again, we at page finding just that, that's of good is portion that. as a there So supporting with

that million, trust So we've is withheld kind would right reinsurance that. accounts behind that accounts of $XXX Mod in support supporting funds are got And about those also and there transactions. Co. then that

vehicles. So, well, capitalized

John Barnidge

fantastic. That's Thank you, Georgette.

Georgette Nicholas

John. Thanks,

Operator

have Piper ahead. John We from go Sandler. Instructions] John, a [Operator from you. please Thank follow-up question Barnidge

John Barnidge

very much. you Thank

your expectations You about you roughly sales had new composition XX% entrants, in first the noted FIA quarter. Then talked intense in for competition I script. with

So how think year? the balance the the of of composition you. and about sales between FIA’s in should Thank prospectively we MYGA's

Georgette Nicholas

maintain XX%-XX%. where the of Thanks, we which follow-up. consistent for target is were kind that think, John I similar to is our of view Yes, XXXX, for

be we're slightly, in I think which dynamics that the some expect given we would pricing, market activity. seeing and to move are that may around somewhat where seeing distribution we but our consistent

tend it, we the cases we in and the to at reinsurance some be but consistent that's market of with the expect lean a obviously somewhat towards for us that think piece dynamics to given MYGA would I the moment.

John Barnidge

you. Thank

Georgette Nicholas

Thanks.

Operator

There at are Thank this time. questions additional no waiting you.

So to to I'd closing Nicholas over the like remarks. Georgette pass conference for

Georgette Nicholas

Thank you. forward Thanks soon. great Midwest a talking And your day. joining us. interest and appreciate again to for with Have in you look

Operator

your for participation. first Thank That quarter call. concludes earnings you Holding Midwest XXXX the

may You now lines. disconnect your

Midwest Holding (MDWT) 17 May 222022 Q1 Earnings call transcript