ifer (US:CNFR)2020-11-14 15:04Financial Data and Key Metrics Changes - Gross written premiums increased over 10% in Q3 2020 to just under $30 million [8] - The company reported earnings per share on a GAAP basis of $0.06, compared to a net loss of $1.2 million or $0.13 per share in the prior year [31] - The combined ratio was 111% in Q3 2020 compared to 109% in the prior year period [29] - Net investment income was $776,000 during Q3 2020, down from $1.2 million in the prior year [31] - Book value at quarter end was $4.40 per share [32] Business Line Data and Key Metrics Changes - Personal lines generated a 68% combined ratio, with a 24% top line growth in gross written premiums [11][26] - Commercial lines premiums grew by over 9% in the quarter, maintaining high overall premium retention levels [12] - The company transitioned its business split to 90% specialty commercial and 10% personal lines [10] Market Data and Key Metrics Changes - The company reported lower instances of overall claim activity attributed to individuals being at home during the pandemic [11] - Submission growth continued to trend higher throughout 2020, with the home state of Michigan remaining the largest premium state [18] Company Strategy and Development Direction - The company is focusing on transitioning away from personal lines coastal wind exposure towards specialty core commercial business [9] - The strategy includes cultivating relationships with agents and insureds that meet selective underwriting criteria [12] - The management emphasized the importance of a balanced book covering both commercial and personal lines [10] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the current business mix and the ability to generate sustainable operating profits [26] - The company has taken a cautious approach to COVID-19, focusing on employee safety while maintaining service levels [13] - Management noted that claims volumes have significantly decreased, particularly in liability lines [14] Other Important Information - The company has seen a significant reduction in wind-exposed premium, correlating with improved personal lines performance [25] - The company reported adverse development in certain commercial liability lines, contributing to the loss ratio [29] Q&A Session Summary Question: Can you provide more color on the reserves this quarter? - Management indicated that the development was primarily due to Pennsylvania and Florida liability claims, with expectations for improvement as statutes run in 2021 [35] Question: How is the claim inventory managed through COVID? - Management reported a significant reduction in outstanding claims, with a 20% decrease since the beginning of the year [40] Question: What challenges are affecting the expense ratio? - Management noted that increased reinsurance costs and reinstatement premiums have impacted the expense ratio, but they expect improvements as earned premiums grow [44] Question: How have the 2019 reserves held up in 2020? - Management stated that the 2019 reserves have held up well, with improved results expected [70] Question: What is the outlook for the Sycamore wholesale agency operations? - Management expects revenue from Sycamore to increase slightly as they continue to grow their surplus lines business [73]