American Coastal Insurance Corporation · NASDAQ:ACIC
American Coastal Insurance — United Insurance Holdings — Investor Presentation (December 2009)
22 slides from American Coastal Insurance's investor presentation, Dec 10, 2009
Slide 1: Investor Presentation
Exhibit 99.1 December 2009 Investor Presentation UNITED INSURANCE RESPONSIVE ¢ STABLE ¢ INNOVATIVE
Slide 2: Safe Harbor
Safe Harbor 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. Without limiting the generality of the foregoing,
Slide 3: United Insurance at a Glance
United Insurance at a Glance Underwrites homeowners insurance and selected small business insurance in the state of Florida Founded in 1999 to capitalize on Florida state legislation to promote the formation of homeowners insurance companies Became public in September 2008 via merger with FMG Acquis
Slide 4: Compelling Investment Highlights
Compelling Investment Highlights Fragmented market provides significant growth opportunities Expansion in Florida (United currently has only 1.8% market share) Safe and sustainable business model due to underwriting discipline Profitable in each year of Company’s history, including storm laden years
Slide 5: Fragmented Florida Market
Fragmented Florida Market Creation of the Florida Hurricane Catastrophe Fund in early 1990s A reinsurance-like entity (Citizens Insurance) funded by a portion of insurance premiums and managed by the Florida State Board of Administration. Designed to mitigate losses to the industry and promote the f
Slide 6: United Overview
United Overview United conducts business through three wholly-owned subsidiaries Licensed insurer that writes Licensed managing general Provides claims adjusting all policies, conducts policy agent that is responsible for all services assumptions, collects other insurance-related premiums, pays loss
Slide 7: United's Subsidiaries and Services
United’s Subsidiaries and Services United Insurance Management Licensed MGA providing all insurance-related operations Employs all United personnel Sells policies through retail agents (93% of premium) Designs and manages commercial lines programs (7% of premium) Conducts policy and claim administra
Slide 8: Diversified Geographically
Diversified Geographically The United portfolio has a broad distribution across 64 counties in Florida Policy Concentration by County 8
Slide 9: United Underwriting expertise
United Underwriting expertise Underwriting standards aimed at minimizing loss and maximizing premium In-house risk modeling allows for appropriate geographic distribution of exposures and better capital allocation Zip code analysis is completed monthly to reallocate portfolio exposure Underwriting g
Slide 10: Strict Underwriting Focus in Florida
Strict Underwriting Focus in Florida Company strives to limit exposure near beach areas Limited coverage west of I-75 and east of I-95 10
Slide 11: Rates and Reward for Risk
Rates and REWARD FOR RISK United’s rates vary across its 108 rating territories United received approval for an overall 12.7% rate increase for its homeowner product becoming effective September 15, 2009 Received approval for a 15% rate increase for its dwelling/ fire product becoming effective on O
Slide 12: Reinsurance Protection
Reinsurance Protection United purchases substantial reinsurance protection for catastrophic events Purchase substantial excess-of-loss multi-event coverage Quality reinsurers with an A.M. Best rating of A- or better 2009 Retention – 46% of statutory surplus Reinsure up to the 100-year probable maxim
Slide 13: History of Hurricanes in Florida
History of Hurricanes in Florida Hurricanes are a fact of life for Florida and the 2004 and 2005 storm seasons were exceptionally active However, during the last 11 storm seasons (1998-2008) there were 9 years with no catastrophic storms for the state Manage Florida risk first through understanding
Slide 14: Case Study: Repeat of 2005 Hurricanes
CASE STUDY: Repeat of 2005 Hurricanes The 2005 hurricane season in Florida (4 hurricanes) was statistically a highly improbable event Gross Loss Before Reinsurance Protection ($ in thousands) The table above illustrates the actual losses United incurred in 2005 as compared to the losses it would occ
Slide 15: Seasoned Management Team
SEASONED Management Team Greg C. Branch – Chairman of the Board Founder of United and chairman with previous public market and insurance experience Chairman of Sunz Insurance Company, a Florida domiciled provider of workers’ compensation insurance Chairman of the Board of Summit Southeast – went pub
Slide 16: Growth Opportunities
Growth Opportunities Florida United has only 1.8% of the Florida market Agents prefer business with well capitalized, experienced company such as United, not Citizens (state-owned insurance company) Apply underwriting skills and experience to selected additional states United makes in-house use of s
Slide 17: Q3 2009 vs. Q3 2008 Comparison
Q3 2009 VS. Q3 2008 Comparison Three Months In thousands, except share numbers and EPS Ended 9/30/2009 9/30/2008 Y-O-Y% Amount Amount CHANGE Gross premiums written $ 33,350 $ 36,200 (7.9%) Gross premiums ceded $ (1,650) $ (2,963) (44.3%) Net premiums earned $ 18,422 $ 20,089 (8.3%) Total revenue $ 2
Slide 18: Balance sheet highlights
Balance sheet highlights (2009 period unaudited, $ in thousands) September December 30, 31, 2009 2008 Total Investments $ 130,288 $ 126,218 Cash and Cash Equivalents 64,461 31,689 Total Assets 303,832 233,121 Long-term Notes Payable 36,106 36,682 Total Liabilities 253,360 190,194 Total Shareholders’
Slide 19: Stable Investment Portfolio
Stable Investment Portfolio Conservative investment philosophy Consists primarily of fixed-income securities Does not use any swaps, options, futures or forward contracts to hedge Average credit quality of fixed income portfolio AA-/Aa3 19
Slide 20: Peer Company Analysis
Peer Company Analysis At September 30, 2009 Price / Market Book Book Forward Cap (in Value p/s Value TTM P/E Dividend Company Name Ticker Price (1) millions) (1) (2) (1,2) (1,2) ROE (2) Yield (1,2) United Insurance Holdings Corp UIHC $4.30 $46 $4.77 0.90 1.97 41.00% 2.50% 21st Century Holding Compan
Slide 21: Investment Conclusions
Investment Conclusions Fragmented Bright Prospects United occupies only 1.8% market share in Florida – presents significant growth opportunities Significant increase in gross written premiums with rates increasing over 2009 - 2010 Safe and Sustainable Growth Business opportunity not fundamentally co
Slide 22: December 2009
December 2009 Investor Presentation
United Insurance Holdings — Investor Presentation (December 2009) on 6ix