United Insurance(ACIC) - 2023 Q3 - Quarterly Report

Financial Performance - Gross premiums written for Q3 2023 were $103.872 million, a slight increase from$103.153 million in Q3 2022[195]. - Gross premiums earned for the nine months ended September 30, 2023, were $468.435 million, compared to$390.576 million for the same period in 2022, reflecting a 20% increase[195]. - Net income from continuing operations for Q3 2023 was $14.373 million, a significant recovery from a loss of$27.446 million in Q3 2022[195]. - Core income for the nine months ended September 30, 2023, was $71.767 million, compared to a loss of$27.731 million for the same period in 2022[195]. - Net income attributable to ACIC for the three months ended September 30, 2023, was $10.568 million, compared to a net loss of$70.884 million in the same period of 2022[197]. - Net earnings attributable to ACIC for the nine months ended September 30, 2023 increased by $468,712,000, or 270.8$295,627,000 from a net loss of $173,085,000 for the same period in 2022[261]. Policy and Operations - Policies in-force decreased by 92.3$58.714 million, down from $72.752 million in the same period of 2022, representing a decrease of about 19.3$41.012 million for the three months ended September 30, 2023, from $100.235 million in the prior year, a reduction of approximately 59.1$59,223,000, or 59.1%, to $41,012,000 for the three months ended September 30, 2023, compared to$100,235,000 for the same period in 2022[236]. - Total operating expenses decreased by $14,924,000, or 13.2$97,865,000 for the nine months ended September 30, 2023, from $112,789,000 for the same period in 2022[267]. Loss Ratios and Claims - The loss ratio, net, improved to 24.7$13,764,000, a decrease of $39,001,000, or 73.9$52,765,000 in the third quarter of 2022[237]. Reinsurance and Catastrophe Losses - A quota share reinsurance agreement was established with TypTap Insurance Company, ceding 100% of UPC's in-force policies in Georgia, North Carolina, and South Carolina[189]. - The company purchased catastrophe excess of loss reinsurance protection up to an exhaustion point of approximately $1,300 million for the 2023 hurricane season, effective June 1, 2023[213]. - The total incurred catastrophe losses for Q3 2023 amounted to$5,847,000, with a combined ratio impact of 10.5%, compared to $35,606,000 and 50.7$508 million of occurrence limit remaining for Hurricane Ian, with an aggregate limit of approximately $980 million after reinstatement premiums[214]. Investment and Cash Flow - Cash, cash equivalents, restricted cash, and investment portfolio totaled$286.944 million at September 30, 2023, down from $340.905 million at December 31, 2022[208]. - The company reported net investment income of$2.709 million for the three months ended September 30, 2023, an increase from $2.236 million in the same period of 2022[197]. - During the nine months ended September 30, 2023, the company experienced cash outflows of$184,889,000, a significant increase from cash outflows of $27,048,000 during the same period in 2022[297]. - Net sales of investments during the nine months ended September 30, 2023, totaled$263,877,000, compared to $99,702,000 in the same period of 2022[298]. General and Administrative Expenses - General and administrative expenses fell by$9,828,000, or 61.6%, to $6,131,000 for the third quarter of 2023, largely due to a one-time goodwill impairment charge[240]. - General and administrative expenses decreased by$10,724,000, or 33.3%, to $21,507,000 for the nine months ended September 30, 2023, from$32,231,000 for the same period in 2022[269]. Company Outlook and Concerns - The company concluded that substantial doubt about its ability to continue as a going concern has been alleviated as of June 30, 2023[293]. - The company did not have any off-balance sheet arrangements or material changes to its contractual obligations at September 30, 2023[301].