ifer (US:CNFR)2022-05-14 19:48Financial Data and Key Metrics Changes - Gross written premiums increased by 9% to approximately $33 million, primarily due to rate increases on the book of business [8][12] - The combined ratio improved to 112% from 129% year-over-year, with a loss ratio of 75%, down from 84% [22][24] - The company reported a net loss of $2.9 million or $0.30 per share, compared to a net loss of $4.6 million or $0.48 per share in the prior year [26][27] Business Line Data and Key Metrics Changes - Commercial lines accounted for 87% of total gross written premiums, with a 5% increase to $29 million [12][16] - Personal lines premiums grew by 39% to approximately $4 million, representing 13% of gross written premiums, with a combined ratio of 85% [19][20][22] Market Data and Key Metrics Changes - The company continues to expand its market share in key geographies, particularly in Michigan, which accounted for over 28% of total gross written premiums [15][19] - Claims in the quick service restaurant sector decreased significantly, with open claims down 52% from Q1 2021 [18] Company Strategy and Development Direction - The company is focused on disciplined expansion in specialty markets and improving underwriting profitability through a better business mix [10][11] - Management is committed to mitigating future reserve development and enhancing loss ratio improvement through various initiatives [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current accident years performing well and noted that claims are decreasing [61] - The company is optimistic about moving in the right direction with its book of business and geographic management [61] Other Important Information - The expense ratio improved to 38%, down 700 basis points from 45% in the same period last year, with a near-term goal of 35% [24][42] - The company recorded a net realized investment loss of $69,000 for the first quarter of 2022, compared to a net realized gain of $2.9 million in the prior year [25] Q&A Session Summary Question: Update on claim costs going down and court activity - Management confirmed that court activity has picked up, leading to both more cases going to trial and quicker settlements [30][31] Question: Patterns in reserve development related to court cases - Management noted that judges are actively trying to resolve cases, which has led to increased activity in the courts [33] Question: Competitive environment for rates and terms - The property side remains a strong rate environment, with evidence of rate increases picking up again into Q2 [35] Question: Expense ratio improvement and future targets - Management indicated that the expense ratio improvement is sustainable, but reaching the 35% target this year may be too ambitious [42][44] Question: Geographic exposures in commercial lines - Management confirmed a decline in Florida exposure while focusing on growth in Michigan and Texas [49] Question: Catastrophe exposure and reinsurance structure - The company has a retention of $2 million for catastrophes, with improved reinsurance coverage reducing overall risk [51][52]