Core Viewpoint - Conifer Holdings, Inc. reported a significant financial shift following the sale of its insurance agency operations, resulting in a net income of $53.3 million for Q3 2024, despite an adjusted operating loss of $7.4 million [2][12]. Financial Highlights - The company achieved a $61 million gain from the sale of its insurance agency operations [2]. - Adjusted operating loss was reported at $7.4 million, equating to a loss of $0.60 per share [2][13]. - Net income for the period was $53.3 million, or $4.32 per share [12][25]. Premiums and Revenue - Gross written premiums decreased by 60.9% to $15.1 million compared to $38.5 million in Q3 2023 [4][6]. - Net earned premiums fell by 39.1% to $14.6 million from $24 million in the prior year [4][24]. - The company anticipates that commercial lines will represent 10% or less of written premiums going forward, focusing instead on personal lines, particularly homeowners insurance in Texas and the Midwest [3][6]. Commercial Lines Business - The commercial lines business saw a drastic decline, with gross written premiums down 85.9% to $4 million in Q3 2024 [7][8]. - The loss ratio for commercial lines increased significantly to 168% compared to 88.8% in the previous year [7][11]. - The company expects continued revenue decline in commercial lines following the sale of its agency operations [6][8]. Personal Lines Business - Personal lines gross written premiums increased by 10.1% to over $11 million, representing 73% of total gross written premiums for the quarter [10][11]. - The combined ratio for personal lines improved to 100.7%, indicating a more favorable underwriting environment compared to 121.7% in Q3 2023 [10][11]. Investment Income - Net investment income remained stable at $1.4 million for both Q3 2024 and Q3 2023 [11][24]. - The company reported a loss of $29,000 from changes in the fair value of equity investments, an improvement from a loss of $87,000 in the prior year [12][24]. Management Commentary - CEO Brian Roney highlighted the successful sale of the insurance agency operations and the strategic focus on personal lines insurance moving forward [2].

Financial Performance - Net earned premiums for the three months ended September 30, 2024, were $14,601,000, down 38.8% from $23,979,000 in the same period of 2023[10] - Total revenue and other income decreased to $16,017,000 for the three months ended September 30, 2024, compared to $25,440,000 for the same period in 2023, a decline of 37.0%[10] - The company reported a net loss from continuing operations of $6,886,000 for the three months ended September 30, 2024, compared to a loss of $4,362,000 in the same period of 2023[10] - The net income (loss) for the nine months ended September 30, 2024, was $(9,044,000), compared to $(7,861,000) for the same period in 2023, indicating a worsening financial performance[20] - The company reported a net loss from continuing operations of $10,895 million for the nine months ended September 30, 2024, compared to a loss of $8,325 million for the same period in 2023[78] - The company reported a segment loss of $(6,294) for the three months ended September 30, 2024, compared to a loss of $(5,020) for the same period in 2023[75] - The total segment loss increased to $7.3 million in Q3 2024 from $5.3 million in Q3 2023[105] Discontinued Operations - Net income from discontinued operations was $60,176,000 for the three months ended September 30, 2024, compared to $1,656,000 in the same period of 2023, indicating a significant increase[10] - The net income from discontinued operations for the nine months ended September 30, 2024, was $58,773 million, compared to $1,417 million in 2023[35] - The company recognized a gain of $54,767 million on the sale of CIS and $6,459 million on the sale of SSU during the three months ended September 30, 2024[34] - The company completed the sale of Conifer Insurance Services on August 30, 2024, for a total consideration of $59.5 million, which includes an initial cash consideration of $46.6 million and contingent payments[30] Assets and Liabilities - Total assets decreased from $315,606,000 on December 31, 2023, to $299,852,000 as of September 30, 2024, representing a decline of approximately 5.0%[7] - Total liabilities decreased from $312,717,000 on December 31, 2023, to $250,801,000 as of September 30, 2024, a reduction of approximately 19.8%[7] - The company’s accumulated deficit improved from $(86,683,000) on December 31, 2023, to $(37,771,000) as of September 30, 2024[7] - Total liabilities as of August 30, 2024, were $39,421 million, compared to $401 million on December 31, 2023[32] - The company’s total liabilities increased to $98,162 million as of September 30, 2024, compared to $97,913 million at December 31, 2022[19] Cash Flow and Investments - The company experienced a significant increase in cash provided by investing activities, totaling $50,528,000 for the nine months ended September 30, 2024, compared to a cash outflow of $(4,040,000) in the same period of 2023[20] - The company reported a significant increase in cash flows from operating activities, with a net cash provided of $6,722 million for the nine months ended September 30, 2024, compared to a net cash used of $5,550 million in the same period of the previous year[20] - The company reported total cash at the end of the period of $32,389 million, a substantial increase from $14,361 million at the beginning of the period[20] - The company reported gross unrealized losses from available-for-sale securities were $10.2 million as of September 30, 2024, due to market conditions and interest rate changes[38] - The company held 282 issues of debt securities with unrealized losses as of September 30, 2024[40] Premiums and Underwriting - Gross written premiums for the three months ended September 30, 2024, totaled $15,086, a decrease from $38,548 in the same period of 2023[75] - The Company exited the Oklahoma business in mid-2024 and significantly reduced writings in commercial lines[75] - For the nine months ended September 30, 2024, gross written premiums totaled $58,370 million, a decrease from $119,436 million for the same period in 2023[78] - The underwriting combined ratio was 143.1% for Q3 2024, up from 120.8% in Q3 2023, indicating an underwriting loss[93] - The company has significantly reduced its writings in commercial lines, with gross written premiums from Texas, Michigan, Oklahoma, and Indiana accounting for 84.2% of total gross written premiums for the nine months ended September 30, 2024[75] Stock and Equity - The company redeemed all of its $6.0 million Series A Preferred Stock on August 30, 2024, incurring a redemption premium of $397,000[69] - The company’s stock-based compensation expense for the nine months ended September 30, 2024, was $62 million, down from $147 million in the same period of 2023[20] - The book value per common share outstanding increased to $4.01 for the nine months ended September 30, 2024, compared to $0.24 for the same period in 2023[108] Risk and Compliance - The company does not believe there is a reasonable possibility of any material loss exceeding amounts already accrued from ongoing legal claims[74] - The company has no contracts referencing LIBOR and does not expect new accounting guidance to have a material impact on its financial statements[27] - The company is currently evaluating the impact of new accounting standards related to income taxes and segment reporting, effective after December 15, 2024[27] Miscellaneous - The company reported that actual results may differ from estimates made in the financial statements, highlighting the inherent uncertainty in financial reporting[24] - The management's discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included in the quarterly report[80] - The company filed its annual report on Form 10-K with the U.S. Securities and Exchange Commission on April 1, 2024[80]

Core Insights - Bishop Street Underwriters has acquired Conifer Insurance Services, marking its entry into commercial lines and expanding its multi-line MGA platform [1][3] - Conifer operates in specialty lines, including small and medium-sized enterprises, hospitality, and auto dealers, presenting growth opportunities for Bishop Street [2] - The acquisition is part of Bishop Street's strategic expansion, aiming to leverage Conifer's infrastructure for geographic expansion and new product development [3][4] Company Overview - Bishop Street Underwriters, a portfolio company of RedBird Capital, focuses on partnering with MGAs and niche underwriting teams to build a differentiated platform [5] - RedBird Capital Partners manages $10 billion in assets and integrates private equity investing with a business-building mandate across financial services, sports, and media [6]

Financial Data and Key Metrics Changes - Overall gross written premium decreased 58% to $19 million, reflecting a strategic shift towards a commission-based revenue model [10] - Conifer's combined ratio was 124% in the second quarter, impacted by weather-related losses [10] - The expense ratio improved to 32%, down 580 basis points from the same period last year [10] - Net loss allocable to common shareholders was $4 million or $0.32 per share, with an adjusted operating loss of $3.6 million or $0.30 per share [11] Business Line Data and Key Metrics Changes - Commercial lines represented approximately 36% of total production for the quarter, with a combined ratio of 105% [7] - Personal lines production was primarily affected by spring storms, particularly in Oklahoma, which is in run-off [8] - Agency commission increased significantly to nearly $9 million compared to $211,000 in the same quarter of 2023, indicating progress in the commission-based revenue initiative [10] Market Data and Key Metrics Changes - The company is focusing on expanding its reach in key markets, particularly in cannabis-related coverage, through partnerships with A-rated capacity providers [6] - The transition to a commission-based model is expected to yield market benefits over time, improving margins and service flexibility [9] Company Strategy and Development Direction - The company is shifting towards a commission-based revenue model through its managing general agency, Conifer Insurance Services, to achieve more stable and predictable revenue streams [5] - This strategic shift aims to enhance overall profitability and create a scalable business model [5] - The focus is on optimizing commercial lines and leveraging agency partners to expand distribution channels [5] Management's Comments on Operating Environment and Future Outlook - Management believes the transition to the MGA model will allow for quicker profitability compared to the previous carrier-based model [12] - The company is optimistic about the personal lines book moving forward, despite challenges faced in the second quarter [12] - Management is focused on achieving operational profitability and favorable returns for shareholders in the long term [9] Other Important Information - The company recorded a net investment income of $1.5 million, up 11% from the prior year [11] - Total assets were reported at $293 million, with cash and total investments of $154 million [11] Q&A Session Summary Question: When does the company expect to become profitable and what are the sources of liquidity? - Management indicated that the shift to the MGA model and improved weather results in personal lines should facilitate quicker profitability [12] - Additional liquidity may be considered through asset sales if necessary [13]

Conifer Holdings Inc. Q2 2024 INVESTOR CONFERENCE CALL August 14, 2024 Nasdaq: CNFR Fulfilling the Unique Needs of Specialty Insurance Markets as a Long-Term Partner 2 SAFE HARBOR STATEMENT | --- | --- | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

Financial Performance - Gross written premiums decreased 57.5% year-over-year to $19.0 million in Q2 2024, down from $44.7 million in Q2 2023[3] - The company reported a net loss allocable to common shareholders of $4.0 million, or $0.32 per share, for Q2 2024[9] - The combined ratio for Q2 2024 was 123.6%, compared to 120.9% in Q2 2023[8] - The loss ratio for Q2 2024 was 91.5%, up from 83.0% in the prior year[8] - Conifer Holdings reported a net loss allocable to common shareholders of $3.95 million for the three months ended June 30, 2024, compared to a net loss of $4.74 million for the same period in 2023, representing a 16.5% improvement[14] - Adjusted operating income for the three months ended June 30, 2024, was a loss of $3.64 million, compared to a loss of $4.73 million in the prior year, indicating a 23.1% reduction in losses[14] - The diluted loss per common share for the three months ended June 30, 2024, was $0.32, an improvement from a loss of $0.39 per share in the same quarter of 2023[14] - Net income (loss) for Q2 2024 was $(3,792) million, compared to $(4,739) million in Q2 2023, showing an improvement of 20.0%[16] - Earnings (loss) per common share improved to $(0.32) in Q2 2024 from $(0.39) in Q2 2023[16] Revenue and Premiums - Gross earned premiums for Q2 2024 were $29,381 million, down from $36,013 million in Q2 2023, representing a decrease of 18.1%[16] - Net earned premiums decreased to $16,666 million in Q2 2024 from $23,183 million in Q2 2023, a decline of 28.3%[16] - Total revenue and other income increased to $26,848 million in Q2 2024, compared to $24,923 million in Q2 2023, reflecting a growth of 7.7%[16] - Agency commission income significantly increased to $8,831 million in Q2 2024 from $211 million in Q2 2023, a remarkable growth of 4011.4%[16] Investment and Assets - Net investment income increased by 11.2% to $1.5 million compared to $1.4 million in the prior year period[3] - The company reported total investments of $144.37 million as of June 30, 2024, slightly down from $145.31 million at the end of 2023, a decrease of 0.6%[15] - Total assets decreased to $292.93 million as of June 30, 2024, down from $311.80 million at the end of 2023, reflecting a 6.0% decline[15] - Cash and cash equivalents decreased to $9.70 million as of June 30, 2024, down from $11.13 million at the end of 2023, a decline of 12.8%[15] Liabilities and Recoverables - Total liabilities were reported at $294.10 million as of June 30, 2024, compared to $308.92 million at the end of 2023, showing a decrease of 4.8%[15] - Premiums and agents' balances receivable increased to $30.58 million as of June 30, 2024, up from $29.37 million at the end of 2023, marking a 4.1% increase[15] - Reinsurance recoverables on unpaid losses rose to $74.36 million as of June 30, 2024, compared to $70.81 million at the end of 2023, representing a 5.5% increase[15] Operational Efficiency - The expense ratio improved by 5.8 percentage points to 32.1% from 37.9% in the prior year[3] - Conifer Holdings continues to focus on growth strategies and capital position improvements, with expectations for future premium increases and operational performance enhancements[11] - The company expects 100% of future commercial gross written premium to flow through its managing general agency (MGA) model[1] - Conifer anticipates that substantially all commercial lines business will be directly written by third-party insurers with A.M. Best ratings of A- or better by the end of Q3 2024[2]

Financial Performance - Net earned premiums for the three months ended June 30, 2024, were $16,666 thousand, down 28.2% from $23,183 thousand in the same period of 2023[8] - Total revenue and other income increased to $26,848 thousand for the three months ended June 30, 2024, compared to $24,923 thousand for the same period in 2023, marking an increase of 7.7%[8] - Losses and loss adjustment expenses decreased to $15,281 thousand for the three months ended June 30, 2024, down 21.1% from $19,319 thousand in the same period of 2023[8] - The company reported a net loss of $3,792 thousand for the three months ended June 30, 2024, compared to a net loss of $4,739 thousand for the same period in 2023, indicating an improvement of 20.0%[9] - The company reported a total comprehensive loss for the three months ended June 30, 2024, was $(3,604) thousand, compared to $(5,480) thousand for the same period in 2023, reflecting a decrease in losses of 34.2%[9] - Net income for the six months ended June 30, 2024, was $(3,561) thousand, compared to $(3,738) thousand for the same period in 2023, indicating a slight improvement[18] - The company reported a segment loss of $4,360,000 for the three months ended June 30, 2024, compared to a loss of $5,265,000 in the same period of 2023, indicating an improvement[62] - The company reported a segment loss of $4,905 million for the six months ended June 30, 2024, compared to a loss of $5,400 million in the same period of 2023[63] Assets and Liabilities - Total assets decreased from $311,804 thousand as of December 31, 2023, to $292,934 thousand as of June 30, 2024, representing a decline of approximately 6.0%[5] - Total liabilities decreased from $308,915 thousand as of December 31, 2023, to $294,099 thousand as of June 30, 2024, a reduction of approximately 4.8%[5] - The company’s accumulated deficit increased to $(90,559) thousand as of June 30, 2024, compared to $(86,683) thousand as of December 31, 2023[5] - Total equity as of June 30, 2024, was $2,559 thousand, down from $2,889 thousand at the end of the previous year[15] - Cash at the end of the period was $9,697 thousand, down from $18,765 thousand at the beginning of the period[18] - The company reported net cash used in operating activities of $(1,952) thousand for the six months ended June 30, 2024, compared to $(1,447) thousand for the same period in 2023[18] - The company reported a total deficit of $90,559,000 as of June 30, 2024, compared to $86,683,000 at December 31, 2023, indicating a worsening financial situation[16] Investment and Income - Net investment income for the three months ended June 30, 2024, was $1,505 thousand, an increase of 11.1% from $1,354 thousand in the same period of 2023[8] - The company reported total investment income for the six months ended June 30, 2024, reached $3,169,000, up 14.0% from $2,781,000 in the prior year[32] - The company reported gross unrealized gains related to equity investments of $354,000 as of June 30, 2024, down from $505,000 at December 31, 2023[33] - The company holds only investment-grade securities, with gross unrealized losses of $13.6 million as of June 30, 2024, primarily due to market conditions[26] - The company executed multiple producer agreements to underwrite a majority of its commercial lines business moving forward[25] Business Strategy and Operations - The company has shifted its business model to focus on producing insurance products through its managing general agency (MGA), with two third-party insurers underwriting most of its commercial lines business by the end of Q2 2024[21] - The strategic shift from premium revenues to commission revenues began in 2024, with expectations that almost all commercial lines business will be underwritten by third-party insurers by Q3 2024[66] - The wholesale agency business segment has become more prominent, with substantially all commercial lines business produced by the MGA and underwritten by third-party insurers[70] - The company is actively considering the sale of assets and business operations to raise capital for debt repayment and improve its financial position[21] - The company expects existing cash and investments to be adequate to meet its capital and liquidity needs over the next twelve months[25] Premiums and Underwriting - For the three months ended June 30, 2024, the Company recorded gross written premiums of $18,971,000, a decrease from $44,674,000 in the same period of 2023[61] - The Company reported net written premiums of $13.2 million, a decrease of 54.9% from $29.3 million in 2023[45] - Commercial lines gross written premiums fell by $28.0 million, or 80.5%, to $6.8 million in Q2 2024, down from $34.8 million in Q2 2023[79] - Personal lines gross written premiums increased by $2.3 million, or 23.0%, to $12.2 million in Q2 2024, compared to $9.9 million in Q2 2023[74] - The accident year loss ratio for commercial lines was 55.8% and for personal lines was 95.3%, resulting in a total loss ratio of 74.7% for Q2 2024[81] - The underwriting combined ratio was 123.6% for Q2 2024, compared to 120.9% for Q2 2023, indicating an underwriting loss[74] Regulatory and Compliance - The company does not expect the new accounting guidance (ASU 2022-06) to have a material impact on its consolidated financial statements[24] - The company is evaluating the impact of new segment reporting guidance (ASU 2023-07) on its consolidated financial statements[24] - The company is assessing the implications of the new income tax disclosure requirements (ASU 2023-09) on its financial statements[24] - The company anticipates needing to contribute between $3.0 million to $5.0 million in additional capital to WPIC to maintain its licenses[100] - A.M. Best downgraded the financial strength ratings of CIC and WPIC to C, indicating a weak ability to meet ongoing financial obligations[68] - Kroll downgraded CIC to BB- and WPIC to B, both with a negative outlook, indicating low financial condition quality[68]

TROY, Mich., Aug. 13, 2024 (GLOBE NEWSWIRE) -- Conifer Holdings, Inc. (Nasdaq: CNFR) ("Conifer" or the "Company") today announced results for the second quarter ended June 30, 2024. At and for the Three Months Ended June 30, At and for the Six Months Ended June 30, Second Quarter 2024 Financial Highlights (compared to the prior year period) Expense ratio improved 5.8 percentage points to 32.1% Net investment income increased 11.2% over the prior year period to $1.5 million Significant progress in planned gr ...

TROY, Mich., Aug. 12, 2024 (GLOBE NEWSWIRE) -- Conifer Holdings, Inc. (Nasdaq: CNFR) announced today that it will host a conference call/webcast on Wednesday, August 14, 2024, at 8:30am Eastern Time to discuss financial results for the second quarter ended June 30, 2024. The Company plans to release its second quarter financial results after the market closes on Tuesday, August 13, 2024. Investors, analysts, employees and the public are invited to listen to the conference call via: Webcast: CNFR Q2 2024 Fin ...

News Release Management Comments Nick Petcoff, CEO of Conifer, commented, "We are pleased to see the early signs of progress resulting from our strategic shift away from a risk-bearing carrier revenue model, toward wholesale agency, production-based revenue. Results to date have been encouraging, and we are proud to report a profitable first quarter for Conifer. " • Combined ratio was 96.7%, an improvement of 2.8 percentage points from Q1 2023 • Expense ratio improved 2.6 percentage points to 34.7% • Net in ...