ifer (US:CNFR)2021-02-28 06:27Financial Data and Key Metrics Changes - Conifer reported a gross written premium increase of over 9% for the full year 2020, with a notable 14% increase in Q4 2020 compared to Q4 2019, totaling just under $29 million in written premiums [9][10] - The company achieved a GAAP earnings per share of $0.34 in Q4 2020, compared to a net loss of $0.32 per share in the prior year period [11][31] - Book value per share increased to $4.59 at year-end 2020 [11][33] Business Line Data and Key Metrics Changes - The small business segment led growth in 2020, while the hospitality segment, including bars and restaurants, was down only 20% in terms of premium for the year [21] - Personal lines, particularly low-value dwelling business, performed well, with a combined ratio improving by 29 points to 89% for the full year [23][24] Market Data and Key Metrics Changes - Conifer maintained an overall account retention rate at or above 90% for the full year, indicating strong relationships with agents and customers [18] - The company experienced a significant reduction in claims activity due to the pandemic, with expectations of some reversal in 2021 [12][22] Company Strategy and Development Direction - The focus for 2021 will be on growing the top line through targeted rate increases and new policy additions in core specialty markets, while also aiming to reduce operating expenses to achieve an expense ratio of 40% or below [12][13] - Conifer plans to leverage technology to enhance customer service and agent engagement while reducing operating expenses [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2021, anticipating a return to normalcy and profitable growth across all sectors [14][34] - The company acknowledged the challenges posed by the pandemic but highlighted the resilience and adaptability of its employees [8][16] Other Important Information - Total assets increased to $262 million at December 31, 2020, compared to $247 million at the end of 2019 [33] - The company reported a net investment income of $563,000 for Q4 2020, down from $860,000 in the prior year period, but realized gains increased significantly to $3.6 million [31] Q&A Session Summary Question: Impact of reinsurance on business and targets for loss and expense ratios - Management acknowledged rising reinsurance rates but noted that they have managed to keep costs relatively stable while reducing retention levels [35][36] Question: Details on low-value dwelling product exposure in Texas - The company confirmed exposure in Texas but indicated that the majority of policies do not cover freeze claims, with a potential net loss of $2 million [43][45] Question: Drivers of loss reserve development in commercial lines - The majority of development was attributed to the quick-service restaurant business in Florida, with significant reductions in exposure since 2018 [47][49] Question: Expected returns with a 40% expense ratio - Management clarified that the 40% expense ratio is a short-term goal, with a long-term aspiration of 35% [40][41] Question: Breakdown of growth from rate and market share expansion - Growth was attributed to a combination of rate increases and market share expansion, particularly in the property line of business [54][56]