Workflow
United Insurance(ACIC) - 2022 Q4 - Earnings Call Transcript
ACICUnited Insurance(ACIC)2023-03-02 23:25
Filings
Slide

Financial Data and Key Metrics Changes - The company reported a GAAP net loss of 294.9millionor294.9 million or 6.84 per share for Q4 2022, compared to a net loss of 2.3millionor2.3 million or 0.05 per share in the previous year [14] - The core loss for Q4 2022 was 273millionor273 million or 6.33 per share, compared to a core loss of 1millionor1 million or 0.02 per share in the prior year [14] - The gross loss estimate from Hurricane Ian increased from 1billionatSeptember30,2022,to1 billion at September 30, 2022, to 1.54 billion at year-end [15] Business Line Data and Key Metrics Changes - The commercial lines business reported pre-tax earnings of 3.7millionforQ4and3.7 million for Q4 and 35.8 million for the year, with gross written premium for the quarter at 122million,up30.4122 million, up 30.4%, and for the year at 508 million, up 20.4% [10] - The combined ratio for the commercial lines was 89.5% for Q4, with an underlying combined ratio of 68.5% [11] - The personal lines business incurred most of the losses, while commercial lines had approximately 16millionofnetlossesrelatedtocurrentaccidentyearcatastrophes[15]MarketDataandKeyMetricsChanges−Theaveragerisk−adjustedrateinthecommerciallinesincreasedover4016 million of net losses related to current accident year catastrophes [15] Market Data and Key Metrics Changes - The average risk-adjusted rate in the commercial lines increased over 40% in Q4, the highest in 15 years, with the average building valuation up 11% year-over-year [10] - The average hurricane deductible increased from 4.3% to 5.0% year-over-year across the portfolio [10] Company Strategy and Development Direction - The company is continuing its withdrawal from personal lines, having exited various states and entered into an agreement with Slide Insurance Company to offer replacement policies to at least 72,000 policyholders [6][8] - The focus is shifting towards a specialty commercial lines business, with expectations of strong historical performance from American Coastal [12] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment over the developments leading to the receivership of United P&C but indicated that this closure allows for a more stable and profitable future [16][20] - The Florida catastrophe market is described as significantly harder than in previous years, presenting both challenges and opportunities for pricing and portfolio quality improvement [12] Other Important Information - The company incurred several nonrecurring charges in Q4, including a 23 million impairment loss related to United P&C's investment portfolio and a $20 million write-down of deferred acquisition costs [20] - The company has provided unaudited pro forma financials to illustrate the impact of deconsolidating United P&C from its results [16][17] Q&A Session Summary - No specific questions or answers were provided in the transcript, indicating the end of the Q&A session without further inquiries from participants [21]