American Coastal Insurance Corporation · NASDAQ:ACIC
American Coastal Insurance — United Insurance Holdings — Raymond James 39th Annual Institutional Investors Conference 2018
22 slides from American Coastal Insurance's conference presentation, Mar 5, 2018
Slide 1: Raymond James 39th Annual Institutional Investors Conference
United Insurance Holdings Corp. NASDAQ: UIHC Raymond James 39th Annual Institutional Investors Conference March 5, 2018 | Orlando, FL
Slide 2: Presenting on Behalf of UIHC
2 MARCH 2018 INVESTOR PRESENTATION Presenting on Behalf of UIHC John Forney has served as our Chief Executive Officer and a member of our Board since June 14, 2012. He assumed the additional role of President in July 2013. From 2002 until he joined UIHC, Mr. Forney served in a number of different ca
Slide 3: The UPC Story
3 The UPC Story
Slide 4: Company Overview
4 MARCH 2018 INVESTOR PRESENTATION United Insurance Holding Corp. (NASDAQ: UIHC) is the holding company for United Property & Casualty Insurance Company (“UPC”) and its affiliated companies. UPC is a specialized residential and commercial property and casualty insurance underwriter with a geographic
Slide 5: UPC Has a Significant Market Opportunity Relative U.S. Hurricane Risk
5 MARCH 2018 INVESTOR PRESENTATION UPC Has a Significant Market Opportunity Relative U.S. Hurricane Risk¹ ¹ Source: AIR Worldwide ² Source: Karen Clark & Company Export capabilities to all cat-exposed areas Exposed Property Values ($ billion) ² Coastal Peak State All TIV TIV Coastal TIV 1 New York 7
Slide 6: UPC's Three Proven Pathways for Growth
6 MARCH 2018 INVESTOR PRESENTATION UPC’s Three Proven Pathways for Growth Organic Underwriting Carrier Partnerships Mergers & Acquisitions 12,000 Appointed Independent Agencies & MGA’s Nationally – this is our primary focus Highest premium- in-force of any producer Largest producer of our new busine
Slide 7: UPC's Value Proposition
7 MARCH 2018 INVESTOR PRESENTATION UPC’s Value Proposition
Slide 8: Accumulated Cyclone Energy (ACE)
8 MARCH 2018 INVESTOR PRESENTATION Accumulated Cyclone Energy (ACE) Sources: Dr. Klotzbach/Colorado State University and AIR Worldwide 259 250 231 230 227 227 226 211 205 0 50 100 150 200 250 300 1933 2005 1893 1926 2004 1995 2017 1950 1961 ACE is a value that can convey the destructive potential of
Slide 9: UPC Expects to Outperform the Industry
9 MARCH 2018 INVESTOR PRESENTATION UPC Expects to Outperform the Industry Manatee Sarasota Charlotte Lee Collier Monroe UPC Market Share Per County Hurricane Irma Overview ¹ • UPC’s overall market share in Florida – 6.56% BUT • UPC has some of the largest market share in counties in the direct path
Slide 10: 2017 Hurricanes in Perspective
10 MARCH 2018 INVESTOR PRESENTATION 2017 Hurricanes in Perspective 2 CAT 4’s through our 2 largest states with Irma impacting our largest area of concentration used just 18% of our program 2017 Events 2017/18 EXHAUSTION ($2.77B) 2017 Reinsurance Remaining Estimated Modeled Expected Loss from Histori
Slide 11: Investment Thesis
11 MARCH 2018 INVESTOR PRESENTATION Investment Thesis BIG MARKET OPPORTUNITY • Permanent dislocation/lack of capacity in windstorm exposed markets • Small market share needed to generate significant premium growth and strong returns • UPC was the 21st largest homeowners insurer in U.S. for 2016 with
Slide 12: UPC Insurance Financial Overview
12 MARCH 2018 INVESTOR PRESENTATION Brad Martz Chief Financial Officer UPC Insurance Financial Overview
Slide 13: Q4-2017 Highlights
13 MARCH 2018 INVESTOR PRESENTATION Q4-2017 Highlights IV. NON-RECURRING CHARGES • $5.3m reduction in tax expense for Q4 related to the Tax Cuts & Jobs Act • $2.4m increase in amortization expense in Q4 related to accelerated software amortization I. RECORD OPERATING RESULTS • Q4-17 produced record
Slide 14: 5-Year Underwriting Performance
14 MARCH 2018 INVESTOR PRESENTATION 5-Year Underwriting Performance Underlying combined ratio consistently near our target of 85% 1 Catastrophe losses (CAT) include all events in excess of $1 million of incurred losses from 2 or more claims. 2 Underlying combined ratio, a measure that is not based o
Slide 15: Core earnings are growing
15 MARCH 2018 INVESTOR PRESENTATION Core earnings are growing EBITDA ¹ EBITDA excluding CAT ¹ Adding back depreciation and amortization to earnings before income tax is helpful analytically given the significant non-cash expenses related to recent acquisitions Catastrophe losses are core to our prop
Slide 16: Components of Earnings Before Tax
16 MARCH 2018 INVESTOR PRESENTATION Components of Earnings Before Tax Our Focus is on Improving Underwriting Results Underwriting gains represent the true earnings power of UPC over the long- term but… CAT is why we exist and a reality that distorts core performance in the short-term -120,000 -70,00
Slide 17: Gross Expense Ratios
17 MARCH 2018 INVESTOR PRESENTATION Gross Expense Ratios Merger distorts comparability with PY 2017 % GPE 2016 % GPE Change Gross Premiums Earned (GPE) $ 986,023 $ 666,829 319,194 I Policy acquisition costs (PAC) 175,448 17.8% 117,658 17.6% 57,790 0.1% II Operating and underwriting 27,674 2.8% 20,52
Slide 18: Strong Liquidity & Low Leverage
18 MARCH 2018 INVESTOR PRESENTATION Strong Liquidity & Low Leverage Holding Co. Liquidity Financial Leverage Underwriting Leverage $ in millions 12.0% 6.2% 4.9% 18.3% 23.6% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 2013 2014 2015 2016 2017 $28.5 $52.3 $75.1 $36.5 $163.1 $- $50.0 $100.0 $150.0 $200.0 2
Slide 19: Conservative Investment Portfolio
19 MARCH 2018 INVESTOR PRESENTATION Conservative Investment Portfolio • Designed to preserve capital, maximize after-tax investment income & liquidity while minimizing asset & interest rate risk • As of Dec. 31, 2017, 99.8% of the Company’s fixed maturity portfolio was rated investment grade – Modif
Slide 20: Consistent Value Creation
20 MARCH 2018 INVESTOR PRESENTATION Consistent Value Creation 510% INCREASE IN GAAP EQUITY FROM 2012 - 2017 $ in thousands 87,986 537,125 - 100,000 200,000 300,000 400,000 500,000 600,000 2012 2013 2014 2015 2016 2017 GAAP Equity STAT Equity 17.1% CAGR IN BOOK VALUE PER SHARE FROM 2012-2017 $5.70 $1
Slide 21: Conclusion
21 MARCH 2018 INVESTOR PRESENTATION Conclusion Long Track Record of Success Conservatively Capitalized Significant Market Opportunity Major Investment in the Platform Shareholder Value Creation
Slide 22: Cautionary Statements
22 MARCH 2018 INVESTOR PRESENTATION Cautionary Statements This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements include expectations regarding our diversification, growth opportunities, ret
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