Fg Nexus Inc. · NASDAQ:FGNX
Fg Nexus — 1347 Property Insurance Holdings — Investor Presentation (June 2017)
30 slides from Fg Nexus's investor presentation, Jun 15, 2017
Slide 1: Investor Presentation June 2017
Investor Presentation June 2017 1
Slide 2: Safe Harbor
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH Safe Harbor 2 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 expec
Slide 3: What is 1347 PIH?
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH What is 1347 PIH? Ticker: (NASDAQ: PIH) Stock Price: $7.80 (as of 6/6/2017 ) Shares Outstanding: 5.96 million (as of 3/31/2017) Book Value: $7.83 (as of 3/31/2017) Market Cap: $46.2 million (as of 6/6/2017) Sector / Industry: Insurance 3 PIH is a proper
Slide 4: Compelling Investment Opportunity
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH Integrated Insurance Company Targeting Potentially High Return Markets Experienced Management Team Favorable Reinsurance Market Expansion Plans into Additional Coastal States Trading at a Discount to Book Value Compelling Investment Opportunity 4
Slide 5: Experienced Management Team
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH • Extensive executive leadership experience in the insurance industry including board seats with Kingsway Financial Services In c. and Atlas Financial Holdings, Inc. • Founder of Itasca Financial LLC, an advisory and investment firm specializing in the
Slide 6: Diverse Book of Policies
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH Diverse Book of Policies 6 Policy Breakdown as of March 31, 2017 Type of Policy Policy Count % of Total Policies in Force Homeowners 18,733 53.22% Wind/Hail 10,458 30.91% Manufactured Home 4,604 13.08% Dwelling Fire 810 2.39% Total 35,202 100.0% Homeown
Slide 7: Consistent Top-line Growth
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH Consistent Top - line Growth 7 - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 Policy Count Policy Count $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 Net Premium Earned Net Premium Earned
Slide 8: Targeting the Right Markets at the Right Time
Targeting the Right Markets at the Right Time
Slide 9: Targeting the Correct Markets
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH Targeting the Correct Markets 9 • Target coastal states with high property premiums in U.S. • Seek favorable legislative environment • Areas where industry giants (State Farm, Allstate, Farmers) are looking to decrease coastal risk exposure • Locations
Slide 10: Coastal State Premiums Exceed National Average
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH Coastal State Premiums Exceed National Average 1 10 State 2015 Average Homeowner’s Premium 2016 Average Homeowner’s Premium % Change Total 2016 State DPW ($ mln ) DPW Change Versus 2015 Florida $1,079 $1,122 3.99% $13,329 - 2.3% Texas $1,110 $1,159 4.41
Slide 11: PIH Building Market Share
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH Source : SNL Financial PIH B UILDING M ARKET S HARE 11 • PIH has consistently pointed to an intermediate term market share goal for Louisiana of 2% to 3%. At December 31, 2016, PIH’s market share was 1.75%. • For 2016, the total market dollar volume of
Slide 12: Current Markets and Expansion
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH Texas (Admitted and Writing) Louisiana (Admitted and Writing) Florida (Admitted) • Large market opportunity • Potential partnership opportunities • Company focusing on homeowners along with “wind - only” policies and other underserved markets • Depopula
Slide 13: Louisiana
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH Louisiana • Second high est overall insurance rates in the country ― Average annual premium : $ 1 , 142 ( 1 ) • Low loss cost and, attritional (non - catastrophe) loss ratios run less than 20 % ― Wind - only policies experience less than 10 % • Wind/hai
Slide 14: Texas
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH • Large market opportunity • Potential partnership opportunities • Company focusing on homeowners along with “wind - only” policies and other underserved markets and products • Depopulations from Texas Windstorm Insurance Association (TWIA) • Consider o
Slide 15: Florida
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH • Favorable legislative environment • Improving regulatory environment • Large market opportunity • Recently approved to begin writing policies in the state • Plan to develop the business “organically” • Will review depopulation opportunities • Extensiv
Slide 16: Blending A High Growth Business With Conservative Underwriting Criteria
Blending A High Growth Business With A Conservative Underwriting Criteria
Slide 17: Business Model
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH Business Model 17 • Claims are a natural and expected aspect of our business – we are able to differentiate ourselves among our competitors by delivering timely and accurate resolution when claims occur • We design, model and operate the business with t
Slide 18: Positioned for Profitability
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH Positioned for Profitability 18 ($3,612) ($9,939) ($16,372) $5,729 $5,669 $10,279 ($2,302) ($9,805) ($30,000) ($25,000) ($20,000) ($15,000) ($10,000) ($5,000) $0 $5,000 $10,000 $15,000 2014 2015 2016 CAT Storm losses Ex-CAT Operating Income Net loss and
Slide 19: Reinsurance Structure
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH Reinsurance Structure Company Created a Reinsurance Program Focused on Preserving Capital 19 Maison Catastrophe Reinsurance Structure Treaty Year 2017 - 2018 $200 M Top, Drop & Agg . $25 M xs $175 M $197 M Top, Drop & Agg . $22 M xs $175 M $175M 5 th XO
Slide 20: Current Premium Growth
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH $25.9 $30.4 $8.2 $8.2 $0M $5M $10M $15M $20M $25M $30M $35M YE 2015 YE 2016 Q1 2016 Q1 2017 Net Premiums Earned Current Premium Growth 20 $43.9 $51.3 $10.8 $12.8 $0M $5M $10M $15M $20M $25M $30M $35M $40M $45M $50M $55M YE 2015 YE 2016 Q1 2016 Q1 2017 G
Slide 21: Net Loss and Loss Adjustment Expense Breakout
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH Net loss and Loss Adjustment Expense Breakout 21 Key Component Expenses as a Percent of Total Net Premiums Earned 8.9% 32.2% 7.3% 12.9% 3.7% 13.3% 15.9% 19.1% - 1.0% 0.6% - 1.2% -20% 0% 20% 40% 60% 80% 100% 2014 2015 2016 CAT weather Non-CAT Weather Non
Slide 22: Disciplined Underwriting Practices
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH Disciplined Underwriting Practices PIH has disciplined underwriting practices in place to select quality risks for wind / hail - only and full coverage policies 22 • Develop products tailored for the market • Utilize technology to adequately assess insu
Slide 23: Balance Sheet That Can Support Growth
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH Balance Sheet That Can Support Growth Portfolio Composition As of March 31, 2017 ▪ Investment Grade Fixed Income – 92 . 9 % of Portfolio Assets . ▪ Equity Investments – 3 . 3 % of Portfolio Assets ▪ Other - 3 . 8 % of Portfolio Assets ▪ At March 31 , 20
Slide 24: Peer Comparison
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH Peer Comparison 24 Company Name Ticker Market Capitalization ($M) Closing Price ($)* Basic Book Value per Share MRQ ($) Gross Premiums Written Five - year CAGR LTM (%) Loss Ratio MRQ (%) Combined Ratio MRQ (%) Expense Ratio MRQ (%) Total Equity/ Total A
Slide 25: Investor Takeaways
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH Investor Takeaways 25 • Well - capitalized with clean balance sheet • Potential for consistent profitability and ROEs based on current pricing metrics in non - CAT years • Focused on market, management is familiar with, in geographic areas with addressa
Slide 26: Appendix
(»\ 1347 PROPERTY INSURANCE HOLDINGS. Appendix
Slide 27: Balance Sheet
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH Balance Sheet (in thousands) 27 March 31, 2017 (unaudited) December 31, 2016 Assets Total investments $ 35,200 $ 28,396 Cash and cash equivalents 37,141 43,045 Deferred policy acquisition costs, net 4,426 4,389 Premiums receivable, net of allowance for
Slide 28: Consolidated Statement Of Income
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH Consolidated Statement Of Income 28 Three months ended March 31, 2017 2016 Revenue: Net premiums earned $ 8,172 $ 8,221 Net investment income 168 115 Other income 377 263 Total revenue 8,717 8,599 Expenses: Net losses and loss adjustment expenses 3,631
Slide 29: Ex-CAT Operating Income Reconciliation
1347 PROPERTY INSURANCE HOLDINGS • NASDAQ: PIH Ex - CAT Operating Income Reconciliation 29 ( in thousands ) 2014 2015 2016 U.S. GAAP net (loss) income $ 3,646 $ (1,673) $ 11 Plus: Income tax (benefit) expense 2,083 (663) 108 Plus: Loss on Termination of MSA - 5,703 355 Plus: CAT storm losses - 2,302
Slide 30: For Additional Information
For Additional Information Investor Relations At The Company The Equity Group Doug Raucy Chief Executive Officer draucy@maisonins.com Jeremy Hellman Senior Associate jhellman@equityny.com Contact Us 30
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