Earnings call transcript Q4 2022

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Operator

Hello everyone, and welcome to the Midwest Holdings Incorporated Fourth Quarter 2022 Results and Full Year 2022 Results. My name is Charlie, and I'll be coordinating the call today. [Operator Instructions].

I’ll now hand over to our host, Tom Bumbolow to begin. Tom, please go ahead.

Tom Bumbolow

to call. fourth welcome year and and earnings XXXX morning, Midwest quarter Holding's full Good Tom Head is Midwest. This Bumbolow, here Business at Development of Distribution and

me Minnich. CEO, be as Joining President presentation as our Mike Nicholas, well our CIO, and today's for Georgette will

issued quarter and Midwest release XXXX full fourth results. financial our our evening, year earnings Yesterday announcing

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

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

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

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

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

under the conference section. that website on cause Form replay of our For A you a could be more from call the detailed actual will of Investor description our will available factors, differ once XX-K, materially where XXXX factors statements. a of please review results our this Relations our again, forward-looking risk see to discussion company's

measures Midwest you remind we'll the call would discuss performance. some like in non-GAAP I during also that addressing to

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

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

Georgette Nicholas

on year, the the Midwest strategic XXXX. financial appreciate to cover I'll joining company's quarter the update our welcome for driving and business We progress. call. focus, Holdings you and year the for trends XXXX and in earnings an Today, fourth Tom, the Thanks, full results

We're returns. the our excited in progress of and annuity results investing and our XXXX, premium, investment in performance pleased business with execution and the capabilities. core growth of from portfolio, selling business in We're the and of seeing hard strengthening specifically on and focus reinsuring and foundational written our work to products those generate the the around liabilities the

prior improvement income million year. the to For last year net a and we increase at $XX.X in the more statutory direct premium of the $XXX.X was in retained which compared million a the written $XX.X to million million year the $XX.X GAAP Driving year, investment achieved million was in of this revenue supported compared of $X.X basis which portfolio, loss an of XXXX, the net for for performance accounting generated year. on

in offset by in increase in was realized captured value revenue of the derivatives, This was market which losses. a loss

management were fee ceding portfolio asset policy service fee consistent. in fees or We strong the Improvement revenue saw revenue while direct grows, quarter, administration continued to amortization, compared XXXX. which annuity earned commission, up and but from fourth quarter $XXX.X down million in the of quarter continue of were premiums third written XXXX, million, fourth the from XX.X% the in slightly as $XXX.X

environment. market annuity We and new fixed with pricing growing a see competitors a dynamic

is service in sales focus a the to pricing on continue into XXXX. competitive and position maintain order Our to momentum

writing Florida received efforts remain very business State to to excited begin Georgia. We're approval expansion and priority. in key a have

premium add also written. to approvals these We and our Dakota. of South North the could growth approximately existing product We in received that addition anticipate XX% states

applications as progress. they updates and provide in We process have will other active we

during place the existing XX.X%, growth was and strong the given Our had market in footprint dynamics XXXX. year-over-year we state

We on technology in our and product new people. with continue partners focus accelerate making to to investments key distribution development growth,

$XXX.X or compared premium XXXX XX.X% or in million for XXXX million XX.X%. was $XXX.X Ceded with

processes We them. demand work have ongoing for many and through and continue partners with reinsurance to structures

$XX.X compared ceding XXXX, to commission received in during XXXX. in million million we $XX.X fees Overall,

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

XX, was balance overtime. As $XX recognized the million deferred of a on sheet December transactions be in gain which revenue XXXX, on coinsurance there and will

benefiting approximately continues million of as Our $X.X X%. up at producing to Overall, $XXX year is we invested billion in asset reached market end rates, which the and from an XX, portfolio yield higher XXXX, are base of grow from December opportunities XXXX. interest and overall

negative embedded in by the were fall the of options helped liabilities increase and the in to Overall, our mark-to-market the reported of value GAAP value our interest credited allowance. due options expenses the in

The as it scales growth and XX%, was of we the new XX% in growth written to opportunity. growth approximately business invest smaller relation premium as to in expenses in of accelerate in continue over the the to

and written fees Total product with taxes initiatives. associated and related capital technology, related state costs and expenses distribution, are increased expenses to premiums from with expansion premium to along increased variable

to Salaries of manage repositioning and support and personnel with addition, in and a benefits the tighter growth retention increased labor market.

realize to scale efficiencies increase and expense as improvement, the we business. and working are We

Now view turning based XXXX, current on to market. guidance of the for in business the our

written in the that premium in momentum quarter we and With XXXX. far first the saw so XXXX, of sales the

the fourth the quarter this first last quarter to consistent year. of expect with We be year

the we $XXX anticipate full of now. of the to premiums for million year, million written XXXX to be in year range as $XXX For the

expect to begin written would of As and over half to we premium an Florida Georgia see year. the back in increase moving, get we the

premium ceded XX% fees generate capital. managed to on to and seed commission The in ongoing goal is XX% of approximately to year a average

XX% ced strong. seeing partners we're in our to to the approximately from demand XXXX, reinsurance is expect XX% given We

$XX of growth to million general million to focus to management efficiencies approximately measure investments We on the continue administrative key full We the expenses making still expense for management, a year basis, with on a and within business technology. bring anticipate while and to of be non-GAAP $XX support XXXX.

our investments and for our provide insurance reinsurance needed executing to goals. remain and tomorrow help the products holders to through is work deliver and retirement focused clients plan their goal results Our both shareholders. strong long-term to reach We them with for to core policy strategy on

creating focus and strategic technology capitalize service, a services by on distinguishing capabilities on Our administration in technology leverage written improve risk to support using mitigate captive of in by to remains reinsurance market structures, reinsurer management to products, by and providing effectiveness, by vehicles. investing processes support. to And leveraging investing core the and indices, provide including finally, efficiency growing ourselves and and to assets premiums enhance our reinsurance capital around and that

than our is Midwest and positioning committed results the team and stronger for driving ever, growth. the forward, As we move at to opportunity business is continued

open we'll for Now, up questions. it

Operator

John, our Now your John is go Instructions] Barnidge ahead. Piper line of from comes [Operator Sandler. open, please first question

John Barnidge

you the Thank for good much and morning. opportunity very

applications can time, Now that the contribution and those your that approvals? you've gotten talk status timeline a two first additional approvals of of added, you sight other and Thank your about be a how states for maybe meaningful states line for with the in could that you.

Georgette Nicholas

John. Yes, Thanks the morning, good question. for

of that to to that of it's as given and it. model process certainly I effort, see into goes again, a we think, by application and depends to lot and expansion the our takes through get take information again, through volume. it's our a reinsurance, approved, certainly a the year state go and use have sometimes and again state fully an see influenced you time but that a the there's again, process we and And events, half up on it can

distribution, annuity certainly in with again So, are from Georgia. our states two XX% off where There up again, that of positioned large our be existing we're premium. see and perspective. we we'll happy that Florida we potentially believe, to to And growth are

again, which Southeast. IMOs concentrated So, where mainly the kind other the is we've states of our are,

piece a that have Again, through. do. of results that our applications working will XXXX, so active filed be number of We obviously for review the just and we've they statutory we're annual that a

hopeful that we're the we to move through see So, year. progress as we continue

And -- get time it once up add so in does state, and and months that running. a certainly, again, few a it you're take takes license agent's to could

goal as state time. again, will to meaningful through, XX states state of a period over come a our footprint, So, it on to into expect impact we certainly, is take XX would get but footprint production, that, time get

John Barnidge

helpful. fourth rate quarter. the to Investment income from question, the up appears talk benefited a present follow you well? may. NII, not investments last have three And Thank what quarters additional in if as marks, Can the That's we run I higher you. view very retained about as other asset should given

Georgette Nicholas

question. the for John thanks -- think I Yes,

of again, I little fourth a income the in we bit decline in quarter. think saw investment

we through and income it's timing assets. Some of combination other investment of some invested our that a running on have of other line. earnings -- that Certainly, around FX things was things things

second or kind around to are forward that We we So, as somewhat earnings third and when expect, we with in really income some around through. come move timing concerns of the consistent seeing saw it's what again, see don't of we we would any investments, more issues of investment our is those quarter. any of

Home we Loan the certainly, work to of a year that the investments again Federal cash we've leverage we'll to income run to of I put half feel use our to that ability lot And like there XXXX. rate. began Bank in results the think had we we of back think that we in some and the made investment and the see add some

John Barnidge

for you the thank Yes, opportunity.

Georgette Nicholas

questions. the Thanks, John. Appreciate

Operator

therefore, this you this At your Thank the currently have Instructions] we joining, and concludes Q&A lines. no and may call. for further questions, you [Operator now disconnect today's time,

Midwest Holding (MDWT) 28 Mar 232022 Q4 Earnings call transcript