ifer (US:CNFR)2023-11-10 14:59Financial Data and Key Metrics Changes - Gross written premiums for the third quarter increased by 17% to over $38 million compared to the prior-year period, driven by organic growth and ongoing rate increases [2][40] - The overall combined ratio for the quarter was 121%, primarily due to elevated storm activity, while the accident year combined ratio before storm losses was 95% [8][4] - Net investment income rose by 69% to $1.5 million during the quarter, with a 113% increase to $4.1 million for the first nine months of 2023 [10] Business Line Data and Key Metrics Changes - Commercial Lines business accounted for approximately 75% of total gross written premiums, with production up 3% to $28 million despite planned premium reductions [2] - Personal Lines represented just over 25% of total gross written premiums, totaling $10 million for the quarter, with a 53% loss ratio through nine months [3][4] Market Data and Key Metrics Changes - The small business segment within Commercial Lines showed strong potential for continued performance, contributing significantly to gross written premiums [2] - The Personal Lines business faced challenges, particularly in Oklahoma, leading to a decision not to renew that book of business [3] Company Strategy and Development Direction - The company is focusing on refining its business mix by concentrating on select specialty lines where it has a competitive advantage and historical profitability [1] - There is a commitment to attentive pricing practices and responsible claims management to improve combined ratios going forward [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver long-term value to shareholders, emphasizing the strength of underwriting teams and their expertise in select markets [50][52] - The company anticipates improved financial results as the impact of storm-related losses diminishes [5] Other Important Information - Total assets at quarter-end were $293 million, with cash and total investments of $159 million, and a book value of $0.96 per share [12] - The company reported a net loss of $2.7 million or $0.22 per share for the quarter, compared to a net loss of $1.5 million or $0.14 per share in the prior-year period [11] Q&A Session Summary Question: Impact of the transaction with Core Specialty on results - Management indicated that the transaction would enhance the statutory strength of the insurance companies and reduce acquisition costs, leading to more efficient writing of other business [21][22] Question: Expected impact on gross premiums - It was noted that there would be a near-term dip in gross premiums due to the transaction, but growth in other areas would help offset this decline [25] Question: Unusual difference between gross premiums and net written premiums - Management confirmed that the transaction affected the unearned premium, which showed up as ceded written, impacting net written premiums for the third quarter [26]