Fg Nexus Inc. · NASDAQ:FGNX
Fg Nexus — 1347 Property Insurance Holdings — IPO Roadshow (March 2014)
26 slides from Fg Nexus's IPO roadshow presentation, Mar 7, 2014
Slide 1: Initial Public Offering March 2014
Initial Public Offering March 2014 Issuer Free Writing Prospectus Filed pursuant to Rule 433 Registration No. 333 - 193314 March 7, 2014
Slide 2: Safe Harbor
Safe Harbor This document contains forward - looking statements and management may make additional forward looking statements in response to your questions . Forward - looking statements include statements regarding the intent, belief or current expectations of the Company and its management about t
Slide 3: Free Writing Prospectus Statement
Free Writing Prospectus Statement This presentation highlights basic information about us and the offering . Because it is a summary, it does not contain all of the information that you should consider before investing . We have filed a registration statement (including a prospectus) with the SEC fo
Slide 4: Offering Summary
Offering Summary 4 Issuer 1347 Property Insurance Holdings, Inc . (“PIH”) Insurance Subsidiary Maison Insurance Company (“Maison”) Exchange / Ticker Nasdaq: ("PIH") Shares Offered 2,272,727 Over - allotment Option 340,909 Price Range $10.00 - $12.00 Expected Pricing Date March 25, 2014 Use of Primar
Slide 5: Management Background
Management Background 5 • Current management team founded the Company in 2012 on the premise of leveraging years of experience in markets where there is a substantive need for well - run insurance carriers • Over 100 years of combined homeowners’ insurance experience in coastal states Gordon G. Prat
Slide 6: Management's Criteria ~ Targeting the Correct Market
Management’s Criteria ~ Targeting the Correct Market 6 Create a homeowners’ insurance company in states where there is a significant potential for generating high returns on equity with controlled risk Market Criteria Includes: • Target states with high property premiums in U . S . ~ hardening rates
Slide 7: Compelling Investment Opportunity
Compelling Investment Opportunity 7 Integrated Insurance Company Targeting High Potential Markets Offering Rationale • IPO proceeds to be used to fund growth of PIH: Increase surplus to grow policy holders in Louisiana Explore acquisition and start - up possibilities to rapidly expand into other sta
Slide 8: 1347 Property Insurance Holdings
1347 PROPERTY INSURANCE HOLDINGS
Slide 9: Business Overview ~ What is PIH
Business Overview ~ What is PIH 9 • PIH is a holding company that owns an admitted property and casualty insurance company based in Louisiana, doing business as Maison Insurance Company and a MGA doing business in Louisiana, Maison Managers Inc . • Maison Insurance Company provides full coverage to
Slide 10: Company History
Company History 10 * Approximately 2,500 remain in force as of 12/31/2013 2012 2013 2014 Maison Insurance Company is Formed in October 2012 October 2012 Company names DouglasRaucy CEO December 2012 Maison participates in Louisiana "wind/ hail-only" depopulation from Citizens, LA's state run insurer
Slide 11: Louisiana ~ An Ideal Initial Market to Enter
Louisiana ~ An Ideal Initial Market to Enter 11 • Among the high est overall property insurance rates in the country • Low loss costs and attritional (non - catastrophe) loss ratios • Wind/hail - only policies are limited to providing coverage for these types of weather • Favorable regulatory enviro
Slide 12: Assuming Policies From Citizens ~ How it Works
Assuming Policies From Citizens ~ How it Works 12 Louisiana Citizens Property Insurance Company, or Citizens • Citizens c urrently writes homeowners insurance for approximately 8 % of Louisiana properties as an insurer of last resort • The state of Louisiana implemented an insurance “take - out” pro
Slide 13: Effective Distribution ~ Multiple Methods of Increasing Policy Base
Effective Distribution ~ Multiple Methods of Increasing Policy Base 13 • Since its founding, Company has established a network of agents throughout the state of Louisiana • Focus on service and quality claims handling • Company has seen steady organic policy growth since entering independent agency
Slide 14: Disciplined Underwriting Practices
Disciplined Underwriting Practices 14 • Develop products tailored for the Louisiana market • Utilize technology to adequately assess insurance to value • Physically inspect every insured risk written organically through independent agents • Use of credit • Manage catastrophe risks through reinsuranc
Slide 15: Reinsurance Rates Continue to Improve
Reinsurance Rates Continue to Improve 15 • Reinsurance brokers predict increased reinsurance capacity and lower prices “At July 1, we saw continued significant decreases in U.S. property catastrophe program pricing.” – David Flandor, Global Head of Business Intelligence at Guy Carpenter Referring to
Slide 16: Significant Reinsurance Coverage for Small Policy Base
Significant Reinsurance Coverage for Small Policy Base 16 • Maison Insurance Company was created to serve as beginning of a longstanding insurance company • Company has created a reinsurance program focused on preserving capital • Expects to utilize traditional reinsurance and the insurance - linked
Slide 17: Growth Strategy
Eas 1347 PROPERTY INSURANCE HOLDINGS Growth Strategy
Slide 18: 2014 – Expansion into Other Coastal States
2014 – Expansion into Other Coastal States 18 Favorable Legislative Environment Company would seek “wind - only” policies and other underserved markets Ramp - up will be accelerated through partnerships Last hurricane to hit Hawaii was Iniki in 1992 and that only hit one island, Kauai. PIH intends,
Slide 19: Market Opportunities
Market Opportunities 19 The following represents the approximate aggregate industry premiums for targeted markets in the states that PIH anticipates writing (in millions): PIH’s goal is to capture between 2% and 3% of the Louisiana market in the first three years of operation State Aggregate Premium
Slide 20: Consolidated Balance Sheet
Consolidated Balance Sheet 20 December 31, 2013 2012 Assets Cash and invested assets Cash $ 15,007 $ 5,525 Short - term investments pledged, at cost 100 100 Fixed income securities, at fair value 301 - Preferred stock, at fair value - 1,875 Total cash and invested assets 15,408 7,500 Premiums receiv
Slide 21: Consolidated Statement of Income and Comprehensive Income
Consolidated Statement of Income and Comprehensive Income 21 $ in 000’s Year Ended December 31, 2013 Year Ended December 31, 2012 Revenues Premiums $ 4,983 $ 346 Net investment income 47 13 Other income 61 - Total revenues 5,091 359 Expenses Net losses and loss adjustment expenses 2,928 9 Amortizati
Slide 22: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows 22 Year and period ended December 31, 2013 2012 Cash Flows From (for) Operating Activities Net loss $ (748) $ (120) Adjustments to reconcile net loss to net cash from (for) operating activities: Premiums receivable (1,714) (2,091) Additions to deferred policy acq
Slide 23: Selected Quarterly Financial Data
Selected Quarterly Financial Data 23 2013 (in thousands, expect per - share amounts) Total 4 th Quarter 3 rd Quarter 2 nd Quarter 1 st Quarter Total Revenues $ 5,091 $ 2,562 $ 1,060 $ 533 $ 936 Total Expenses 6,235 1,531 979 1,319 2,406 Income (loss) before income tax (1,144) 1,031 81 (786) (1,470)
Slide 24: Peer Comparables – Publicly-held Homeowners' Insurance Companies
Peer Comparables – Publicly - held Homeowners’ Insurance Companies 24 * Capital IQ Company Ticker Stock Price Market Cap ($MMs) LTM PE Price / Book Homeowners Choice HCI $50.06 $575.4 9.0X 3.29X Federated National Holding Company FNHC $15.93 176.9 11.0X 1.60X United Insurance Holdings Corp. UIHC $14
Slide 25: Investment Considerations
Investment Considerations 25 • A homeowners’ insurance company focused on a market geography with addressable needs • Dedicated management team with experience launching and rapidly expanding coastal insurance companies Remaining focused on the markets we know • Clean balance sheet with no legacy is
Slide 26: Contact Us For Additional Information
Contact Us 26 For Additional Information At The Company Doug Raucy Chief Executive Officer draucy@maisonins.com
1347 Property Insurance Holdings — IPO Roadshow (March 2014) on 6ix