Financial Data and Key Metrics Changes - Core pretax income for Q1 2020 was over $13 million, an increase of $9 million from the previous year, with ex-cat pretax core income up about $15 million year over year [7] - Gross premiums earned were $344.6 million, an increase of $33 million or 11% year-over-year [12] - The combined ratio improved to 99%, a nearly 5-point improvement year-over-year, while the underlying combined ratio was 90.7%, compared to 94.2% last year [13] - The gross loss ratio improved by 3.7 points to 29.8%, and the net loss ratio improved by 4.1 points to 53.7% compared to the first quarter last year [14][15] Business Line Data and Key Metrics Changes - Premiums written increased approximately $17 million or 5.2% from a year ago, driven by a 7% growth in personal lines and a 16% growth in commercial lines [13] - Personal lines policy earned premium per policy was up about 2%, indicating that the bulk of the 10% forced increase has not yet matured into the book [8] Market Data and Key Metrics Changes - Florida accounted for approximately 69% of the growth in direct premiums year-over-year, with all regions outside Florida showing modest increases [13] - Ceded earned premiums were 44.4% of gross premiums earned, compared to 42.1% last year, due to increased sessions to the quota share reinsurance program [14] Company Strategy and Development Direction - The company is focused on maintaining strong capital positions and has a robust reserve strategy, with favorable reserve development reported [10][15] - The company is well-prepared for the current operating environment, with minimal exposure to COVID-19 claims and effective remote operations [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the positive underlying trends and improvements in claims handling, indicating that the favorable trends observed in Q1 were not solely due to the pandemic [22] - The company anticipates continued growth in premiums and profitability, with a focus on ensuring that rate trends grow faster than loss trends [39] Other Important Information - The total assets of the company were $2.33 billion, with cash and invested assets of $1.28 billion [16] - The statutory surplus declined approximately $12 million or 3% to $404 million during Q1, primarily due to unrealized losses on equities [17] Q&A Session Summary Question: Can you provide insight on the reinsurance renewal program and pricing? - The remaining 9% of the reinsurance program is spread throughout the program, with constructive discussions ongoing regarding pricing [20] Question: Was the improvement in claims volume due to the pandemic? - Any downturn in claims volume was marginal, with positive trends observed in January and February as well [22] Question: What is the reason for the decline in assumed premiums? - The decline was due to a major partner terminating their participation in the program, but other partners are increasing their involvement [27] Question: Can you comment on the reinsurance market and new partners? - The company has welcomed new partners with strong balance sheets and has seen good receptivity in the reinsurance markets despite disruptions [32] Question: How is the company managing reserve development? - The company is closely monitoring actual development versus expected development, with favorable variances reported for the first quarter [42]
United Insurance(ACIC) - 2020 Q1 - Earnings Call Transcript