American Coastal Insurance Corporation · NASDAQ:ACIC
American Coastal Insurance — United Insurance Holdings — Investor Presentation (March 2015)
29 slides from American Coastal Insurance's investor presentation, Mar 3, 2015
Slide 1: United Insurance Holdings Corp. Investor Presentation
United Insurance Holdings Corp. NASDAQ: UIHC Investor Presentation March 3, 2015
Slide 2: Mission-Vision-Strategy
2 March 2015 INVESTOR PRESENTATION Mission-Vision-Strategy To build a sustainable franchise that delivers quality insurance products in select markets in order to produce superior risk-adjusted returns for investors. MISSION To be the premier provider of property insurance in catastrophe exposed are
Slide 3: Product Offerings
3 March 2015 INVESTOR PRESENTATION Product Offerings Homeowners Dwelling Fire Condo Owners Renters Flood Commercial Residential
Slide 4: UPC Investment Thesis
4 March 2015 INVESTOR PRESENTATION UPC Investment Thesis •Proven leader in the world’s peak exposure zone for hurricane risk •Cumulative written premiums since inception $2.4 billion; cumulative claims paid over $1 billion •Anti-fragility demonstrated during 16 different catastrophe events since 199
Slide 5: Key Measures of Success
March 2015 INVESTOR PRESENTATION 5 Key Measures of Success Jan. 1, 2013 Jan. 1, 2014 % Change Jan. 1, 2015 % Change Two-year CAGR Premium in force (000's) Florida $ 221,551 $ 326,885 47.5% $ 328,060 0.4% 21.7% Non-Florida $ 25,279 $ 53,808 112.9% $ 109,314 103.2% 107.9% Total $ 246,830 $ 380,693 54.
Slide 6: Proven Pathways for Growth
March 2015 INVESTOR PRESENTATION 6 Proven Pathways for Growth Organic Underwriting Carrier Partnerships Depopulation Initiatives Merger & Acquisition 4,000 Appointed Agencies Nationally Citizens (FL) TWIA (TX) NCJUA (NC) Family Security Holdings (HI & LA) Allstate (FL) Arbella Mutual (MA)
Slide 7: Five Foundations of Shareholder Value Creation
March 2015 INVESTOR PRESENTATION 7 Five Foundations of Shareholder Value Creation I. Financial Strength II. Products That Work III. Superior Claims Service IV. Ease of Doing Business V. Fair Pricing Opportunity, Leadership & Execution Shareholder Value Creation
Slide 8: Opportunity
March 2015 INVESTOR PRESENTATION OPPORTUNITY
Slide 9: UPC's Huge Market Opportunity
9 March 2015 INVESTOR PRESENTATION UPC’s Huge Market Opportunity Relative U.S. Hurricane Risk¹ ¹ Source: AIR Worldwide ² Source: Karen Clark & Company Exposed Property Values ($ billions) ² All TIV Coastal TIV Peak Coastal Area State 1 New York 6,989 4,938 2,132 2 Florida 4,227 3,305 608 3 Texas 5,4
Slide 10: Leadership
March 2015 INVESTOR PRESENTATION LEADERSHIP
Slide 11: Leadership team
11 March 2015 INVESTOR PRESENTATION Gregory C. Branch Chairman • Chairman of UPC Insurance since inception in 1999 • Prior Member of Lloyd’s of London for over 20 years • Former Chairman of Summit Holding Southeast, Inc. (acquired by Liberty Mutual) John L. Forney, CFA President & CEO • 25+ year suc
Slide 12: Execution
March 2015 INVESTOR PRESENTATION EXECUTION
Slide 13: State Expansion Status
13 March 2015 INVESTOR PRESENTATION State Expansion Status Strategy not limited to just one or a few select markets No need for huge market share (reduces concentration risk) Organic growth not dependent or focused on take-outs (non-recurring) Now licensed in 18 of 19 coastal states ¹ Written Premiu
Slide 14: Executing Geographic Diversification
14 March 2015 INVESTOR PRESENTATION 163,314 81% 15,186 8% 10,900 5% 9,990 5% 3,064 1% 39,140 19% FL SC MA RI Other (NC,NJ & TX) Executing Geographic Diversification Policies in-force at 12/31/2014 Policies in-force at 12/31/2013 Total PIF: 202,454 1 Total PIF: 252,104 1 ¹ Policy numbers exclude floo
Slide 15: Quality Growth Reflected in Portfolio Metrics
15 March 2015 INVESTOR PRESENTATION 0 50 100 150 200 250 300 $0 $20 $40 $60 $80 $100 $120 YE 2011 YE 2012 YE 2013 YE 2014 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% 22.0% 24.0% YE 2010 YE 2011 YE 2012 YE 2013 YE 2014 Total Insured Value and Policies In-Force Quality Growth Reflected in Portfolio Metrics Mo
Slide 16: Financial Strength
March 2015 INVESTOR PRESENTATION FINANCIAL STRENGTH
Slide 17: UPC is Conservatively Capitalized
17 March 2015 INVESTOR PRESENTATION UPC is Conservatively Capitalized in thousands 12/31/2014 12/31/2013 % Chg Assets Investments $ 381,627 $ 291,660 30.8% Cash 61,391 34,888 76.0% Receivables 31,369 26,076 20.3% Current Assets 474,387 352,624 34.5% Other Assets 109,782 88,606 23.9% Total Assets 584
Slide 18: Investments Avoid Asset Risk
18 March 2015 INVESTOR PRESENTATION Investments Avoid Asset Risk 1 • Designed to preserve capital, maximize after- tax investment income, maintain liquidity and minimize asset risk • As of December 31, 2014, 100% of the Company’s fixed maturity portfolio was rated investment grade – Average duration
Slide 19: Reserve Metrics Compare Favorably
19 March 2015 INVESTOR PRESENTATION Reserve Metrics Compare Favorably Great loss experience PLUS higher average reserves, less pending & more paid Source: SNL & Company Statutory Filings Gross Loss & LAE Ratio Average Gross Loss & LAE Reserve AY UIHC HCI FNHC UVE HRTG AY UIHC HCI FNHC UVE HRTG 2008
Slide 20: 2014-15 Catastrophe Reinsurance Program
20 March 2015 INVESTOR PRESENTATION 2014-15 Catastrophe Reinsurance Program 1 Return time shown using AIR v15 LT no DS (based on 9/30/14 exposures) 30% QS $7M RETENTION $15M xs $10M xs $15m 2nd & Subsequent Events $25.0M LAYER 3 $150M xs $25M LAYER 1 $100M xs $25M 50% 1-year term / 50% 2-year term L
Slide 21: Impact of Historical CAT Events on UPC's Portfolio
21 March 2015 INVESTOR PRESENTATION Impact of Historical CAT Events on UPC’s Portfolio ¹ Source: AIR Worldwide’s estimated insured industry loss includes losses from personal and commercial lines. ² Source: Raymond James analyst’s estimate which includes $27 million of catastrophe losses before inco
Slide 22: Results
March 2015 INVESTOR PRESENTATION RESULTS
Slide 23: FY 2014 Accomplishments
23 March 2015 INVESTOR PRESENTATION FY 2014 Accomplishments 34.7% Revenue Growth 62.7% EPS Growth 27.2% ROAE 46.8% BVPS Growth 81.4% Combined Ratio Key Operating Metrics ¹ ¹ Data as of December 31, 2014 and growth is FY 2014 over FY 2013
Slide 24: Operating Highlights
24 March 2015 INVESTOR PRESENTATION Operating Highlights Strong results fueled by diversification benefits of organic state expansion 1Ceding ratio = ceded earned premiums / gross earned premiums Consolidated GAAP ($000) Q4-14 Q4-13 % Chg YTD 2014 YTD 2013 % Chg Revenue Gross Earned $ 113,767 $ 106,
Slide 25: Components of Operating Return on Equity
25 March 2015 INVESTOR PRESENTATION Components of Operating Return on Equity 1 Core UW Results Driving Returns ROAE ROAE ROAE ROAE ROAE -2.0% 16.1% 16.1% 20.8% 27.2% -10,000 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 YE 2010 YE 2011 YE 2012 YE 2013 YE 2014 Underwriting G/L Investment Income
Slide 26: Impressive Shareholder Returns
26 March 2015 INVESTOR PRESENTATION Impressive Shareholder Returns 1 $- $0.05 $0.10 $0.15 $0.20 $0.25 FY11 FY12 FY13 FY14 FY15 Common Stock Dividends Actual Estimated 2009 2010 2011 2012 2013 2014 UIHC $100.00 $77.63 $111.44 $154.24 $360.32 $597.81 Russell 2000 $100.00 $122.95 $113.91 $128.83 $172.8
Slide 27: Safe Harbor – At a Glance
March 2015 INVESTOR PRESENTATION 27 Safe Harbor – At a Glance Statements in this presentation that are not historical facts are forward- looking statements that are subject to certain risks and uncertainties that could cause actual events and results to differ materially from those discussed herein.
Slide 28: Definitions of Non-GAAP Measures
March 2015 INVESTOR PRESENTATION 28 Definitions of Non-GAAP Measures We believe that investors’ understanding of UPC Insurance’s performance is enhanced by our disclosure of the following non-GAAP measures. Our methods for calculating these measures may differ from those used by other companies and
Slide 29: UPC Insurance - Keep the Promise
——S— UPCZ® INSURANCE Keep the Promise
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