American Coastal Insurance Corporation · NASDAQ:ACIC
American Coastal Insurance — United Insurance Holdings — Q3 2020 Earnings Presentation
14 slides from American Coastal Insurance's earnings presentation, Nov 5, 2020
Slide 1: Investor Presentation Supplement to Third Quarter 2020 Results
Investor Presentation Supplement to Third Quarter 2020 Results November 5, 2020
Slide 2: Company Overview
Company Overview UPC Insurance is a specialty underwriter of catastrophe exposed property insurance in the US United Insurance Holding Corp. (NASDAQ: UIHC) was founded in UIHC as of September 30, 2020 1999 and is the insurance holding company for 5 P&C carriers and Total Assets: $3.06 billion operat
Slide 3: Q3-2020 Executive Summary
Q3-2020 Executive Summary We remain enthusiastic about our strategy despite the unprecedented hurricane activity in 2020 Underlying • Core income excluding named storm losses of $15m or $0.35/share, up $19.5m y/y 1 Results • Underlying gross loss ratio of 23.4% improved 1.5 points y/y Improving • Gr
Slide 4: Summary of Operating Results
Summary of Operating Results Underlying results improved nearly $20m y/y excluding named storms Q3-20 Q3-19 Change Core income (loss) $ (83,847) $ (29,222) -186.9% per diluted share (CEPS) $ (1.95) $ (0.68) NonCAT reserve development Included the following items continued to be better than Net curre
Slide 5: Underlying Results Trending Favorably
Underlying Results Trending Favorably We have positive core earnings momentum excluding the noise from named storms 3Q20 +$19.5m (433%) $0.40 2Q20 +$16.4m (473%) $0.35 Q320 was $17.2m 1Q20 +$5.9m (185%) $0.30 or $0.40 excluding $0.30 the non-recurring $0.21 expense item, up $0.20 $21.7m (482%) y/y $
Slide 6: More Action Being Taken to Improve Results
More Action Being Taken to Improve Results Hard market allows us to be more selective and limit exposure growth while increasing premiums 1. Underwriting Changes • Continue to take rate in every state and product where possible • Increasing minimum deductible requirements for new and renewal busines
Slide 7: Premium Increasing Faster Than Exposure
Premium Increasing Faster Than Exposure Driving more rate relative to TIV & PML is the key to margin improvement Probable Maximum Loss (PML) is the primary driver for catastrophe reinsurance needed and trending favorably 7
Slide 8: Rate Adequacy Is Accelerating
Rate Adequacy Is Accelerating Most states have rate increases earning in with additional rate hikes coming effective 2H-2020 STATE PROGRAM / LOB TYPE / POLICY FORM EFFECTIVE DATE RATE CHANGE STATUS Florida Homeowners HO-3 UPC 11/1/2020 14.1% Approved Homeowners HO-3 FSIC 9/1/2020 14.5% Approved Home
Slide 9: 2020 Hurricane Season in Perspective
2020 Hurricane Season in Perspective Zeta marked the 11th continental US landfall in 2020 eclipsing the prior record of 9 set in 1916 Return Periods for Number of US Hurricanes with Industry Loss > $1 Billion Frequency 1x $1B 2x $1B 3x $1B 4x $1B 5x $1B 6x $1B 7x $1B RT (Years) 1.36 2.61 6.04 15.48
Slide 10: Summary of Named Storm Losses
Summary of Named Storm Losses High frequency of CAT (in virtually every state) with low severity resulted in higher net retentions Estimated Ultimate Loss & LAE Claims Reported as of 11/1/2020 Gross Ceded Net CT FL GA LA MA NJ NY NC RI SC TX Total 1Tropical Storm Fay $ 629 $ (142) $ 487 2 28 34 64 2
Slide 11: Capital Impacted By CAT
Capital Impacted By CAT Sep 30, Dec. 31, ($ in thousands, except per share amounts) 2020 2019 Change Selected Balance Sheet Data Cash & investments $ 1,424,593 $ 1,227,192 +16.1% Financial debt 158,043 158,932 Capital erosion of ~$50m in 2020 driven by the Stockholders' equity attributable to UIHC 4
Slide 12: Reinsurance Renewal Strategy
Reinsurance Renewal Strategy We seek to utilize reinsurance to reduce retentions & earnings volatility going forward 1. Additional Quota Share Nearing Completion • Key reinsurance partners have offered increased quota share protection to reduce leverage • Expected to have an immediate favorable impa
Slide 13: Cautionary Statements
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, retention rates, liquidity, investment
Slide 14: UPC Insurance
UPCZ® INSURANCE Keep the Promises
United Insurance Holdings — Q3 2020 Earnings Presentation on 6ix