TROY, Mich., Nov. 13, 2024 (GLOBE NEWSWIRE) -- Conifer Holdings, Inc. (Nasdaq: CNFR) ("Conifer” or the "Company”) today announced results for the third quarter ended September 30, 2024. This quarter, the Company reported a $61 million gain on the sale of its insurance agency operations, completed in August of this year, along with an adjusted operating loss of over $7 million in the period.
Third Quarter 2024 Financial Highlights
- $61 Million gain on sale of insurance agency operations
- Adjusted operating loss of $7.4 million or ($0.60) a share
- Net income of $53.3 million for the period
Brian Roney, CEO of Conifer, commented, "Third quarter results reflect the successful culmination of the sale of our insurance agency operations to Bishop Street Underwriters. With the sale, and the majority of our commercial lines production in runoff, we are focusing underwriting efforts on select personal lines, particularly in Texas and Midwest homeowners.”
Reduction of Commercial Lines Business
For the period, total Gross Written Premium was down almost 61% overall, and net earned premium was down 39%. As a result of the sale completed in August 2024, we no longer have any insurance agency operations, and we expect a significant decline in revenue. We expect commercial lines business to represent 10% or less of our written premiums going forward. As a result, we expect any future premiums will primarily consist of personal lines business, notably our homeowner's insurance portfolio in Texas and the Midwest. As detailed in the personal lines results overview below, gross written premium for those lines of business for the third quarter of 2024 increased 10% from the prior year period.
2024 Third Quarter Financial Results Overview
| At and for the Three Months Ended September 30, | At and for the
Nine Months Ended September 30, | |||||||||||||||||||||
| 2024 | 2023 | % Change | 2024 | 2023 | % Change | |||||||||||||||||
| (dollars in thousands, except share and per share amounts) | ||||||||||||||||||||||
| Gross written premiums | $ | 15,086 | $ | 38,548 | -60.9 | % | $ | 58,370 | $ | 119,436 | -51.1 | % | ||||||||||
| Net written premiums | 11,174 | 5,689 | 96.4 | % | 39,812 | 53,359 | -25.4 | % | ||||||||||||||
| Net earned premiums | 14,601 | 23,979 | -39.1 | % | 48,154 | 69,114 | -30.3 | % | ||||||||||||||
| Net investment income | 1,391 | 1,439 | -3.3 | % | 4,411 | 4,036 | 9.3 | % | ||||||||||||||
| Net realized investment gains (losses) | (7 | ) | - | ** | (125 | ) | - | ** | ||||||||||||||
| Change in fair value of equity investments | (29 | ) | (87 | ) | 66.7 | % | (182 | ) | 595 | -130.6 | % | |||||||||||
| Net income (loss) allocable to common shareholders | 52,788 | (2,706 | ) | ** | 48,912 | (6,444 | ) | ** | ||||||||||||||
| Net income (loss) allocable to common shareholders per share, diluted | $ | 4.32 | $ | (0.22 | ) | $ | 4.00 | $ | (0.53 | ) | ||||||||||||
| Adjusted operating income (loss)* | (7,352 | ) | (4,275 | ) | ** | (9,554 | ) | (8,456 | ) | ** | ||||||||||||
| Adjusted operating income (loss) per share, diluted* | $ | (0.60 | ) | $ | (0.35 | ) | ** | $ | (0.78 | ) | $ | (0.69 | ) | ** | ||||||||
| Book value per common share outstanding | $ | 4.01 | $ | 0.24 | $ | 4.01 | $ | 0.24 | ||||||||||||||
| Weighted average shares outstanding, basic and diluted | 12,222,881 | 12,222,881 | 12,222,881 | 12,219,713 | ||||||||||||||||||
| Underwriting ratios: | ||||||||||||||||||||||
| Loss ratio (1) | 103.8 | % | 86.9 | % | 84.8 | % | 77.8 | % | ||||||||||||||
| Expense ratio (2) | 39.3 | % | 33.9 | % | 35.2 | % | 36.3 | % | ||||||||||||||
| Combined ratio (3) | 143.1 | % | 120.8 | % | 120.0 | % | 114.1 | % | ||||||||||||||
| * The "Definitions of Non-GAAP Measures" section of this release defines and reconciles data that are not based on generally accepted accounting principles. | ||||||||||||||||||||||
| ** Percentage is not meaningful | ||||||||||||||||||||||
| (1) The loss ratio is the ratio, expressed as a percentage, of net losses and loss adjustment expenses to net earned premiums and other income from underwriting operations. | ||||||||||||||||||||||
| (2) The expense ratio is the ratio, expressed as a percentage, of policy acquisition costs and other underwriting expenses to net earned premiums and other income from underwriting operations. | ||||||||||||||||||||||
| (3) The combined ratio is the sum of the loss ratio and the expense ratio. A combined ratio under 100% indicates an underwriting profit. A combined ratio over 100% indicates an underwriting loss. | ||||||||||||||||||||||
Gross written premiums decreased significantly in the third quarter of 2024 to $15 million, compared to $38.5 million in the prior year period. This decrease reflects the Company's fundamental shift away from commercial lines insurance business. We expect this to continue to decrease following the sale of our insurance agency operations, as the commercial lines business produced in the future by our former insurance agency operations will be written by other carriers.
Commercial Lines Financial and Operational Review
| Commercial Lines Financial Review | ||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
| 2024 | 2023 | % Change | 2024 | 2023 | % Change | |||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||
| Gross written premiums | $ | 4,018 | $ | 28,492 | -85.9 | % | $ | 23,562 | $ | 92,228 | -74.5 | % | ||||||||||
| Net written premiums | 1,481 | (3,155 | ) | 146.9 | % | 14,053 | 29,571 | -52.5 | % | |||||||||||||
| Net earned premiums | 6,428 | 17,315 | -62.9 | % | 23,906 | 51,925 | -54.0 | % | ||||||||||||||
| Underwriting ratios: | ||||||||||||||||||||||
| Loss ratio | 168.0 | % | 88.8 | % | 102.1 | % | 76.0 | % | ||||||||||||||
| Expense ratio | 29.1 | % | 31.7 | % | 29.1 | % | 35.1 | % | ||||||||||||||
| Combined ratio | 197.1 | % | 120.5 | % | 131.2 | % | 111.1 | % | ||||||||||||||
|
| ||||||||||||||||||||||