PTVCA - Earnings call transcript Q2 2018 | Protective Insurance Corp

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Operator

Greetings, and welcome to the Protective Insurance Corporation Second Quarter 2018 Earnings Conference. [Operator Instructions].

As a reminder, this conference is being recorded. I would now like to turn the conference over to Han Huie. Please begin.

Han Huie

you Insurance joining Conference Corporation thank for this Call. and Protective the Second you, all us for morning Thank Quarter XXXX

release, are is may the www.protectiveinsurance.com. If of would call, like online receive which not everyone I live the you that company's webcast remind press the we at which you at it a may website be website, a company's accessed to access inform time, the meaning management deemed hosting certain would did the are as you copy well. Reform to conference in that within of made me and not At Litigation Securities press Act this during the this Private forward-looking statements be statements XXXX. like of which the historical, call for may release,

Corporation and in its Although cause that time based and to give believes statements are it reflected press time the Factors reasonable that actual are no filings with are to assurance materially the release included company's attained. forward-looking risks SEC. expectations on from be the the from any assumptions, expectations can differ with detailed could in results will Protective expectations Insurance

Now Birchfield, and of the President, Insurance introduce to COO ahead. turn I him. call Corporation, CEO and Please to like Protective over go would Randy

William Birchfield

Thanks, quarter Han, results of and reporting welcome second to our XXXX. the for conference call

will and financial our we those Joining regarding regarding our the me turn comments on for completion and by position. answer insurance details current is William questions. of then Upon of update William to Vens, an operations XXXX, our second Chief investments begin Financial Officer. company's presentation comments, providing I'll our for the over quarter

year's loss income a quarter. press million release, $X.X share, $X.XX $XX.X the per or As indicated $X.XX net million which prior or for was share compares our quarter second per second net to of in

driven prior for to million the first XXXX. or the increased per was XXXX, premiums written loss program per during the our Gross company's written for months $X.X Product share year the which channels. the and premiums in period. and the to for $X.X X to $X.XX in XX.X% second written million retail of quarter. and months net current were decreases increase continued second to compared $X.XX a commercial compared of share, $XXX.X or $XXX the in to workers' period. compensation XXXX of of distribution both the Gross totaled first to The million million income quarter compares written quarter products those net increased For by growth $XXX XX.X% $XXX.X million experienced XXXX increases group during million similar X auto

combined produced for the a Our second a $X.X of in to of XX.X%, XXXX line a with plan. in of that quarter the This for million, ratio compares operations combined second quarter result resulting is second of quarter underwriting our XXX.X% XXXX. income ratio

and of prior, the for For favorable reserve development when accident of quarter years second loss place predominately which is year second significant ratio second the XXXX. to accident XXXX, XXXX the compared loss strengthening, was driver XXXX, quarter The million. at lower prior the main of for XXXX, quarter during took $X.X

ratio period. due mentioned For previously. months at XXX.X% Prior the the line quarter ratio period, year-to-date with of for is which year $X.X million the XXXX X ratio the second XX.X%, in for compares was the a with to strengthening reserve XXXX, the plan. also XXXX combined XXXX first development was combined difference XXXX to loss of The favorable mainly combined the

over time. continued rate underwriting that actions, loss expect our in changes combined our will increases lower these and with mix business, We of ratios

accident loss conservative striving positions also year. in current are the We maintain to

building shareholder busy are reflection we a that a of are dimensions quarter the We progress in have of making had a number value.

releases press during of Some via this quarter the made and more recently. second was progress known

in new new are On our symbols Corporation. name. operating continues Protective to trading tradename August earnings noted the we We under PTCV.B. to Insurance NASDAQ X, previous now shareholders and we on started we our when As began company ticker and company, market-facing last symbols single our name, and year transition BWINB This our call, a changing ticker Insurance. our retired capitalizing approved our the brand PTVC.A moved Protective of brand well-established BWINA under

from Our to by to holders balance company, is insurance. month, used Protective integral Baldwin This unsurprising, our part Lyons founded distribution and name forever regarded was strong XXXX. reminder will reserve renaming business history. subsidiary is both word it of stable given that XXXX. story our still of our of executed in outlook very Harry The policy and protective brand and past our A+ Superior, and our brings believe our well partners our incredibly growth Insurance and Best productive is that plans future. Harry By Last A.M. way and Voris of Corporation, a mind the promising of the an in in sheet, first with the in the financial and strength Protective XXXX negative. paves well rating we Voris component a in our our key for Insurance change our legacy strengthening and wonderful be readily affirmed

Best Chairman the provided the operations to business while of our governance Independent continue a of that for with of Board closely plans creation we business Chairman Lead our evolving corporate the quarter, work in role second changes and A.M. Director or a Executive role. any role, announced attributes environment. retiring our pursue the on We and will In the

the a long facilitating management are assist to Board a as Shapiro help Stuart the the a company. of act veteran of late strategic of as Executive XX-year responsibilities the Directors. develop and the Chairman liaison the and during period Lead plan the resigned transition a of Board. that Executive assumed member and Board Board for XXXX of between of to established Bilton, The position Director is the of long-term to the his Chairman Independent serving Steve Board management activities We role the grateful in in us

announced and offer he this executing we a program the company's AmWINS The Board Consequently, two support Transportation successfully to interests wish Chairman more pleased created beginning to for in invested Underwriters other to have fleets Board years, time, resumes has and -- July, the high-quality the thank for this establish to Steve pursuit serve last to enable the Over business four intermediate-sized we and the Underwriters shareholder fleets with shareholder I trucking position administrator, year. to the success. traditional grow as through partnership Executive corporate products offer commercial fourth will providing governance up the guidance trucking the and while AmWINS trucking product. of an the structure. We during to his as him company trucks and are program he the higher insurance in coverage retire quarter XX are us the we interested In underwrite his the and decided our that our remains Protective the and small a value. Transportation partnership will The across Advantage and country. wish with to increase effort transition. best plan

announced platform workers' will As also partnership the an products part product our that partnership, have of with Environmental offer policyholders. of Navigators AmWINS Protective the underwriting Navigators' launch into Transportation the we Advantage existing for to April, Group provide this Program. entered our compensation we In to

the portfolio respective compensation in for and risks available knowledge the for and Navigators Navigators' workers' their are which areas Both nuanced now Our honing as healthcare, products, Navigators' specific will and a capabilities value policies of and is currently industries Navigators option media, and I coverage product provides confident know-how by are faced needs. our markets, developing multiline allied life available strategically workers' within which technology our in key has industry-specific extensive of coverage policyholders add meeting expertise. Navigators by manufacturing Protective arts for entertainment, expertise. deep sciences, the am tailored in leaders compensation protection that industries. our multiline core

value strategic to those the build with shareholders. investments create activities. and details William the the you our now long-term additional our responses according evaluate in along William? overall are financial The We continue continue our call incorporate our trends, to plans designed provide actively last impacts to plans on trends operational will contemplate discussed earnings same the and the business I to for that and continuously related in and business We trajectory. condition.

William Vens

Thank you.

years, the conservative improved company the increase income, has investment past of the designed conducted to is Over portfolio. our the in income. maintaining continuing realignment while few This of investment measured generation to result character portfolio investment a

fixed short-duration invested interest higher of rates, Second positive second increased XXXX. from compared in reinvestment cash average quarter XX.X% investment net income funds reflects increase investment The portfolio the income to to leading higher for quarter yields and flow. an increase our in net resulting income

months For XX.X% the We do in to be the net first future continue modest. investment of increases expect X half compared increased net to income income XXXX, first more of investment to XXXX.

from However, we cash flows. assets estimated future due resulting higher the continue to invested expect positive to increases

income duration, cash, quality has our remained Over the average X.X rating portfolio, of past including effective level an an A+. at credit fixed weighted fixed our S&P approximately cash, duration year, income of The portfolio years. relatively including has of

expense of loss into the to prior our in growth the shorter conservative a products impacted approximately during the yield the accretive short XXXX, quarter commission positions. we the low also the ratio into sales expense leverage. million characterized to increase first consistent from to XX%, given time. sales this ratio expense $XX our at And income which tax with compensation During XXXX are portfolio. rate investments Favorable over Premium positively approximately given these of impact development consistent our short-duration from the reinsurance was curve. utilized the company's of on due intermediate The ratio treasuries, second ratio, prior of treasuries. high-quality, our to of new duration increased of strategy equity of in year XXXX The the leverage when with compared beneficial is year in reflects improve These solidifying equity sales when many investment the expense opportunistically to equity actions beginning expense base the X% workers' million reallocated reallocated the fixed of ceding corporate the investments to tax by income, $XX basis decline nature we our contracts. further expense favorable of lower equity quarter, first yields these fixed end were have months contingent X accident stated

payment flow our Moving XX, positive positive to XXXX. operating X $XX.X of the financial the decrease shareholders June of XX, cash XX, million June the on Operating the resulting first per again $XX.XX, cash June in share months once per XXXX was XXXX. XXXX, during share during second cash share. Book value per months flow a after was to X $X.XX for dividends position of at totaling quarter, ended of $X.XX

share by X months While XXXX. book reduced increased share losses per of share first impacts per during income share, $X.XX other the value operations from dividend by and investment the business and $X.XX core was value per per book of $X.XX

As to answer questions. website a on our press At quarterly statements formal our protectiveinsurance.com. we'd concludes commentary. financial reminder, at and we delighted this release time, This our posted be

Operator

[Operator Instructions].

Jayme question first from coming Wiggins of Our Intrepid Capital. is

Jayme Wiggins

one First and Are way quoting, competitors seeing were morning the buying you I'm underpricing by earnings competitors they commercial they this also one of as this had, their auto "Irresponsible well? business." seeing, I new market reported into and your mentioned

William Birchfield

increases, be There Birchfield. market the a those quite for exits retraction risks. most often they you is Randy on our Thank of of seeing it's we're always folks -- competitors. the the to nature that even respective because the are have frankly, act -- The question, what different going wholesale rate irresponsibly some of contraction the

So their it's it's to not to the a attempting see market, not those unexpected. common way into thing but buy

that, that We doing appear it's broad. not but a competitors of have seen couple be to

Jayme Wiggins

down right. on general. for color I in in also provide And been LPs QX? $X.X you X% unrealized the LPs portfolio? quarter market have equities Can in the the equity was your might think All a in stock about investment strong loss in on additional million It

William Vens

Yes. Thanks for question. the

to have a So When something a our be of long very value long-term doing going time. you're investment a have of do managers well period have over well over to and done you different over lot time. orientation time,

be went systemic matching particularly, specific the you to down on, result But not over that there that's we'd asset with or done there's going nothing just timing. entire a to is XX% of up to or matter class period. Sometimes market, an XX-day to prefer seems report X a particular that's not manager do by to problem something in

William Birchfield

briefly. interrupt, I May

question. first your to response Additional

In the our our buying received. frankly, quite are in action all been business, And across commercial auto rate those that increases aggressively terms rate board of we've in products. of actually taking well space of being increases

it rate the So to and the business, mine buying increases that be others. in companies degree from others may are like face of

Jayme Wiggins

Good right. first Can insurance. to All life company-owned firm us the the bought quarter, why? of hear. In you million $XX tell

William Vens

is Take believe without not Mr. will attractive life. tax he is for will -- deferred life it tax Birchfield long deferred That to tax has be grow for tax deferred service he that for of not CEO, insurance going only grow to a XX. -- him. long us -- come but on He to instance, There time. We're a long him Yes. and I about is some grow to is hoping as money it going benefit. and for will

of decades tax-deferred growth. it's So

attractive Also was So assets. for that motivations. of that charge around one it's the that [indiscernible] wrapper the goes

Jayme Wiggins

can confirm I it a Vanbridge, firm on just the earned And And by nature is that about that talk the contract to consulting think was name. same board entity. a the a maybe little member you of right. bit investors that with All also, that policy? commission ran a

William Birchfield

Yes.

of market the Director and was But received pricing, management was Board was we So offering his he it number yes, after that disclosed. which both confirmed yes, firm, Board. longer no quotes, is a on the party, and related a Moyles market

Jayme Wiggins

And the consulting contract?

William Birchfield

to respect the Difficulty]. [Technical over the With contract, Yes. last

Jayme Wiggins

same nature contract The entity. the of with consulting that

William Birchfield

not Randy hear. you or Birchfield, My what apologies. heard I is did know don't This again.

with consulting business a have continuously oriented address around provided The called take related relationship of the number to primarily changing of nature the today. do and how We years. advantage market aspects of Vanbridge we business. of fronts, interesting those last of They contract were conditions some arrangements couple services company over of on market have a to the production and had effectively opportunities not

us, we So with remains it the and contract as has been very fruitful Vanbridge for speak.

Jayme Wiggins

the Okay. here, little time. to one a bit one monopolize And and got not easy the one appreciate do I call tougher. then I've

let's start your Can a about So just structure premium in with the you easy growth? net that's little talk change reinsurance the one. affecting bit

William Vens

Yes.

been the this if I sliding about in our had the replaced with recall So of directly contracts. have cedes. talked can't mechanisms we've in those scale fixed different past. we've in past, sort reinsurance But And

gross the to time of this much into of get past -- a as [indiscernible] the go less while largely premium from over But in the So larger. it, looks cedes. other and some to nuances we further as going moves fixed past, looks transition between and to biggest net. that's change scales we be disconnect there's sort through impact period, just the smaller gross And the sliding you're it's the to are attributable but transition as There net really structure.

Jayme Wiggins

Okay. And me. last then one for

industry. end price. are while imagine shareholders stuck with for which you other super been all of guys or to a is bottom have close the the now, value your X.Xx pleased you We major here I that And book as all know about can't at

to Board. why issues I'd take at answer, you share structure, of the So love a some turnover very dual-class are lastly, that other investors management on the heard And But few your from today's in the underwriting you've the we're business think concentration, results past just level? before the this I've in hear potential rough isn't years, historical ROE, high. had for which couple you

getting there, the multiple that vision us on you out share get me on with your how a we So can with please mouthful better stock?

William Birchfield

very experiencing you current that contributors items the those today. be out Indeed, question. that could multiple well laid Great we're to Yes.

grow customer business, each combination transportation of in the also a core from of areas away in of our deconcentrate within addressing turn. business of segment That's to class compensation. of actively those are single any to or order or workers' and items continuing We staying competency while

ratio. regard we're result That this to ratio our that's come. Additionally, on with expense plan. future in path in growth periods downward loss near-term associated to comes the will on path stage in penalties at with with ratio, loss plan but growth pressure a long-term and growth strategic That

or industry. in business have of the to short time challenges those the in face the trying we short period grow the results of experiencing So -- the in

and under stress liking. leverage that in that we investment areas trading solutions one, by each of leverage but those had through our that pooling one at underwriting not you working we the multiple understand them is are important doing including happy We're -- are today on other are mentioned everything through we're that The our we situation. to it's individually I order think And challenges. to improve to to go control,

Operator

over like Birchfield comments. would turn At I this time, back closing to Mr. for floor the to

William Birchfield

you. Thank interest next This related look results. in for third our XXXX our Thanks is forward Okay. again your the quarter to We Randy. to company. communication

Operator

concludes thank your you Ladies conference. gentlemen, participation. and today's for This

lines have You your and a may disconnect at this time, wonderful day.

Protective Insurance (PTVCA) 10 Aug 182018 Q2 Earnings call transcript