American Coastal Insurance Corporation · NASDAQ:ACIC
American Coastal Insurance — United Insurance Holdings — Investor Presentation (September 2015)
31 slides from American Coastal Insurance's investor presentation, Sep 9, 2015
Slide 1: Investor Presentation: Managing Volatility
Exhibit 99.1 United Insurance NASDAQ: Investor Presentation UIHCHoldings September Corp.2015 “Managing Volatility”
Slide 2: Vision
Vision To insurance VISION Intrinsic 2SEPTEMBER be the and volatility premier inImplications 2015provider must INVESTOR – and of property canPRESENTATION: –be managed while“Managing generatingVolatility” strong returns for shareholders
Slide 3: Why Insurance Companies Exist
Why “Tropical “Erika — The Insurance 3SEPTEMBER Times-Picayune, CNBC Orlando inherent Wedissipates Exist Storm to 27Sentinel build unpredictability, Aug 2015 Erika Erika’s as15 a tropical diversified, 28 INVESTOR 29strengthens, Aug Aug track15 cyclone, 15shifts both sustainable, PRESENTATION: short
Slide 4: How We Manage Volatility and Win in the Long Term
How Shareholder -Diversify; Strategically Operationally -Financially 4SEPTEMBER Write Generate Low Conservative Insource Robust Strong tooperating multiperil; Manage reinsurance partnerships technological core fee Value income 2015 investments; functions; Volatility and Creation INVESTOR financial w
Slide 5: Growth and Diversification
GROWTH AND SEPTEMBER 2015 DIVERSIFICATION INVESTOR PRESENTATION: “Managing Volatility”
Slide 6: UPC's Relative Market Opportunity: Coastal Exposed TIV by State
UPC’s Relative FL 1Exposed 98765432State 10 11 12 13 14 15 16 17 18 All Total 5,963 7,838 Coastal 1,588 5,610 Peak 1,187 2,484 ²¹Export SEPTEMBER Source: Texas Virginia Florida Massachusetts New Connecticut Louisiana South Alabama North Maine Rhode Georgia New Delaware Mississippi Maryland is TIVCoa
Slide 7: UPC Strategy: Organic Growth Not Limited to Coastal Areas
UPC Strategy Organic No ¹Written SEPTEMBER Allneed states is Licensed Premium growth not forexpected huge limited 2015 not in in market all limited to 2014 INVESTOR to just Target beshare Launched operational one to States coastal Now orPRESENTATION: a few Except July (avoids areas byselect 12/31/16
Slide 8: UPC Achieving Geographic Diversification
UPC 159,221 56,166 [PERCENTA Policies 170,003 [VALUE] 54,044 GE] FL Total 6-month SEPTEMBER SC22,537 is PIF: MA 26% 19% Achieving in-force 74% 115,330 PIF GE] [PERCENTA 215,387 285,333 RI [VALUE] growth Other 2015 [PERCENTA at 59% Growth 12/31/2014 6/30/2015 INVESTOR 32.5% (NC,NJ, (LA, 41% 8% NC, [P
Slide 9: UPC Has Proven Pathways for Growth
UPC has 4,000 Organic Depopulation Carrier Merger SEPTEMBER Appointed Partnerships &Underwriting Four Acquisition Initiatives Proven 2015 Independent INVESTOR Pathways Agencies for PRESENTATION: Growth & MGA’s Nationally “Managing Volatility” 9
Slide 10: UPC's Product Offerings Diversified
UPC’s Product Homeowners Federal Commercial SEPTEMBER 10 FloodResidential Dwelling (not 2015 Offerings at-risk, INVESTOR Fire –fee Residential Condo based, PRESENTATION: Owners CAT onlyhedge) Renters but Diversified “Managing Volatility”
Slide 11: Operational Strength
OPERATIONAL SEPTEMBER 2015 STRENGTH INVESTOR PRESENTATION: “Managing Volatility”
Slide 12: Organizational Structure
Organizational United Delaware Skyway UPC Cayman Hawaii Family Florida 100% SEPTEMBER 12 Re Owned Property Insurance Security Insurer Non Claims Islands NonInsurer by 2015 Insurer Structure NAIC Services, & Reinsurer Holdings, Insurance Underwriters, UIHC FSH Holdings Management, Casualty INVESTOR 1
Slide 13: Investing in Fully Integrated Operations
Investing Fully Claims Roughly preventative Policy New Sophisticated Underwriting Avoiding Product Completed Have SEPTEMBER 13 policy states P&L transitioned Administration Management 60 adverse inresponsibility will development administration full-time key controls pricing 2015 all functional selec
Slide 14: Financial Strength
FINANCIAL STRENGTH SEPTEMBER 2015 INVESTOR PRESENTATION: “Managing Volatility”
Slide 15: UPC Strong Cash and Capital Position
UPC Strong Cash $600,000 Q2-13 Will Low 1Underwriting SEPTEMBER Consolidated Investments Assets 6/30/2015 12/31/2014 789,701 % 584,169 Loss Liabilities 35.2% 118.1% 16.0% 44.2% 72.3% 4.6% Total Stockholders’ 67,638 570,244 $54,436 380,406 24.3% Underwriting 7.7% 49.9% 399,290 381,627 219,457 203,763
Slide 16: Investments Designed to Avoid Asset Risk
Investments Designed As % Value Securities Fixed Cash Equity ¹Total Investment Government Other 20.9% SEPTEMBER 27.6% 24.5% 0.9% 5.0% 0.6% Data of oftotal & cash June Long-Term long ¹Maturities as 20.4% Securities Cash Cash of to Portfolio and 30, term Portfolio June Avoid preserve &and Equivalents
Slide 17: Reinsurance Program Tower 2015-16
2015-16 $1.27B $95.0M 1st Exhaustion $1.05B $125.0M (Single $895.1M .4$928.2M $861.7M 0M (S $564.6M $490.5M $376.4M $3$340.9M $230.4M xs $160.5M $145.0M $100.0M LAYER $45.0M $25.0M $5.0M Layers SEVERITY Since FREQUENCY and (2004 Our plus ²1another SEPTEMBER Revised 25 Shot) Return 45% Event .named P
Slide 18: Conservative Catastrophe Retention
Conservative Catastrophe Named Limit Occurrence Aggregate Facultative 100% $10.0 All Retention Any Florida 1st 2nd ²¹3rd SEPTEMBER AsEvent States & Event designated determined Event Personal Million in Subsequent Windstorm Only excess $25,000,000 (excluding $10,000,000 $1,275,000,000 Reinsurance $1,
Slide 19: Modeled Estimated Impact of Historical Events
Impact Modeled Est. Historical 987654321Event 10 All ³²Multi-state Raymond SEPTEMBER Estimated Andrew Miami Ft. Lake Betsy Katrina Galveston Donna New Wilma modeled Industry Lauderdale Year England Okeechobee of 1965 1960 1926 losses 2005 Historical James 2005 1992 S.S. events Category modeled gross
Slide 20: Results
SEPTEMBER 2015 INVESTOR PRESENTATION: “Managing Volatility” RESULTS
Slide 21: Key Results
Key Results Revenue Underlying 15.1% Growth BVPS 12.6% ROAE 24.1% Despite ¹89.4% SEPTEMBER “Underlying” Operating as $22 Growth ofCombined million June 2015 Metrics results 30, of INVESTOR 2015: exclude Ratio net catastrophe ¹ losses PRESENTATION: incurred losses! from catastrophes “Managing Volatil
Slide 22: Operating Expense Ratio Trends
Operating Gross 24% 26% 28% 30% 4.7% 22% 20% 4.6% 18% 3.1% 2.6% 16% 8% 5% 10% 12% 14% Q2 0% 2% 4% 6% PAC Cost SEPTEMBER 13 16.2% 5.4% 4.7% 4.2% 35%. 2.5% redundancies Operating 6.4% 3.1% Expense Q3 13 Expense 5.0% 4.0% 2.8% 16.4% Q4 2015 Ratio G&A 4.5% 2.9% 13 15.3% of Trends Q1 INVESTOR Components
Slide 23: Consolidated YTD Highlights
Consolidated YTD Gross Revenue Ceded Investment Realized Expenses $120,000 Loss Policy Operating Interest Total Earnings $0 Other Income Net Underlying CR frequency catastrophe SEPTEMBER 86.9% Earned Income & Expense 2015 revenue Inc Earned Acquisition Earned LAE—NonCAT Tax Expense gain(loss) before
Slide 24: Components of ROAE
Components ROAE 50,000 60,000 70,000 40,000 01UW 10,000 Returns YE 30,000 20,000 2011 ¹Underwriting SEPTEMBER 0,000 Trailing YE 2012 16.1% Core Results Driving YEtwelve 2013 YE of G/L 16.1% 2015 YTD Operating 2014 months Investment INVESTOR 20.8% 2015 asReturn of ¹27.2% Income June PRESENTATION: on1
Slide 25: Strong, Consistent Cumulative Performance
Strong Consistent Cumulative 1/1/11 $800.00 $1,000.00 $600.00 2010 $- $200.00 $400.00 UIHC Russell NASDAQ S&P Common $F $0.05 $0.10 $0.15 $0.20 $0.25 Actual per SEPTEMBER Y11 share Insr 2011 FY12 $to Estimated Performance 2000 100.00 Management Change 6/30/15 on EFT Stock Insr 2012 Dividend Value FY
Slide 26: Compelling Current Valuation
Compelling Current NWP Company Allstate Berkshire Erie Federated HCI Horace Heritage Infinity Kemper Mercury National Progressive Safety State Universal United ¹Personal SEPTEMBER Source: Indemnity Group Auto Comb. Insurance Insurance Mann Prop. Valuation Corp. Corporation Insurance General Lines KB
Slide 27: Insider Ownership Properly Aligned
Insider Current Total Alec Bill Sherrill Kern Kent Deepak Kim John Andy Brad 2015 SEPTEMBER Hood Salmon Poitevint Forney Whittemore Martz Davis Director Officer Directors Swenson Interests Hudson Menon Inside 35,000 1,800 3,500 3,000 8,517 Purchases Sales Purchases Sales Ownership: 115,000 2015 and
Slide 28: UIHC Investment Thesis
UIHC Huge Opportunity 9th Proven, Experienced Team Continuity Conservatively Capitalized Conservative Revenue Compelling Valuation Insiders SEPTEMBER in Anti-fragility Market Florida Investment Proven own growth Extrapolation and Internal Stock Small Cumulative areserving Significant, &2015 lot tenu
Slide 29: Corporate Overview at a Glance and Safe Harbor Statements
Safe statements differ “estimate,” projections, could casualty charged legislative the conditions filingson generally accounting subsequent CORPORATE Exchange:Ticker Industry Property/Casualty Homeowners in Business NH, .& Employees Policies 285,333 Cash Dividend (at SEPTEMBER , AL, VA 6/30/2015) 8/
Slide 30: Definitions of Non-GAAP Measures
Definitions We by Combined and the unexpected GAAP SEPTEMBER other difference combined believe prior measure companies year ratio that of loss ratio. between Non-GAAP development. 2015 investors’ excluding is development the We Prior and INVESTOR combined four believe therefore year understanding th
Slide 31: UPC Insurance: Keep the Promise
UPC INSURANCESM Keep the PromiseSM
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