ifer (US:CNFR)2024-08-13 20:26Financial 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]