Financial Data and Key Metrics Changes - The net loss for the first quarter was $4 million, which included $15.6 million in losses from California wildfires, resulting in a net income of $8.2 million excluding these losses compared to $11.4 million in the same period last year [13] - Book value per share decreased from $49.98 at year-end to $47.85 at March 31, primarily due to stock compensation and comprehensive loss [13] - Investment income increased by 2% to $14.8 million from a year ago, with a current book yield on the fixed income portfolio at 4.5% [14][15] Business Line Data and Key Metrics Changes - Consolidated gross premiums increased by 6% to $98.7 million in 2025 compared to $93.5 million in 2024, with a 16% increase in gross written premiums excluding terminated products [19][20] - The Agency and Insurance Services segment generated income of $1.8 million before tax for the quarter, while the consolidated accident year combined ratio was 111.5, improving to 94.8% when excluding wildfire losses [16][18] Market Data and Key Metrics Changes - The underlying core growth excluding terminated products was 16%, with rate increases and exposure growth modestly exceeding estimates of social and price inflation trends [6][9] - The company anticipates annual average catastrophic losses of $17 million, with the recent Los Angeles wildfires exceeding previous models for wildfire risk [10][11] Company Strategy and Development Direction - The company has completed a strategic restructuring to facilitate efficient and controlled rapid product expansion, with expectations for growth fueled by organic growth and focused acquisitions [7][8] - The focus remains on long-term value creation for shareholders, with investments directed towards the new Pan America underwriter operation rather than share repurchases [33][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving premium growth of at least 10% for 2025, with expectations for improved underwriting performance in the latter part of the year [22] - The company is adopting a defensive strategy in investments due to fluctuating interest rates and is closely monitoring potential fraud claims amid economic downturns [38][39] Other Important Information - The company has maintained staff numbers slightly below 2023 levels while managing expenses, with a target to reduce the expense ratio to 37% or lower in the long term [11][12] - Discretionary capital was reported at $251 million as of March 31, which supports growth investments [22] Q&A Session Summary Question: Can the expense ratio drop below 40% in the next two or three quarters? - Management expects the expense ratio to be in the 39% to 40% range for this year, with the targeted 37% achievable in 2026 or 2027 [27] Question: Why issue stock to insiders instead of repurchasing shares? - The decision to issue shares was based on a contractual obligation to compensate for Project Manifest, with the board believing that investing in operations will create more long-term value [33] Question: Will there be more losses from the LA fire? - Most of the losses have been paid out, and management does not expect any material changes in the reported numbers [37] Question: How will economic factors impact claims and profitability? - Management is focused on monitoring potential fraud claims and premium payment interruptions, emphasizing that insurance operates similarly over the long term despite short-term economic fluctuations [39] Question: Should corporate expenses trend back to prior levels post-Q1? - Corporate expenses are expected to trend back towards historical levels, but potential acquisitions may introduce additional expenses [50]