United Insurance(ACIC) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a GAAP net loss of $69 million or$1.60 per share, compared to a net loss of $23.5 million or$0.55 per share in the previous year [17] - The core loss was $64.3 million or$1.49 per share, compared to a core loss of $24.6 million or$0.57 per share a year ago [17] - Gross premiums written for the quarter were $360.1 million, a decline of$66.3 million or approximately 16% [18] - Gross premiums earned decreased by about 14% to $305.8 million [18] - Operating expenses were$56.5 million, a decrease of $11.4 million or almost 17$181 million of gross written premium, surpassing personal lines for the first time, which wrote $179 million [11] - The combined ratio for commercial lines was 61.5%, with an underlying combined ratio of 70.2%, down from 72.4% in the first quarter of 2022 [11] Market Data and Key Metrics Changes - The total number of lawsuits in Florida has decreased from peak rates in June and July of 2021, indicating a potential improvement in the litigation environment [12] - The company anticipates continued growth of 20% or more in commercial lines for at least the next 12 to 18 months [11] Company Strategy and Development Direction - The company has restructured its personal and commercial lines businesses to simplify its structure from five writing companies to three, aiming to reallocate capital and reduce expenses [7] - The focus remains on derisking the personal lines portfolio while enhancing underwriting performance through rate increases and risk selection [10][14] Management's Comments on Operating Environment and Future Outlook - Management noted that inflation and excessive litigation continue to impact claims severity, leading to poor underwriting performance in personal lines [9][14] - The Florida residential market is expected to remain challenging due to a skeptical capital and reinsurance market, elevated catastrophe activity, and ongoing litigation issues [15] Other Important Information - The company recorded a valuation allowance against 100% of its deferred tax asset due to uncertainty about utilizing its net operating loss carryforward [18] - Demotech downgraded the company's rating from A to M, while subsidiaries continue to hold strong ratings [13] Q&A Session Summary - No specific questions or answers were recorded in the provided content, indicating the end of the teleconference and webcast [23]