Fg Nexus Inc. · NASDAQ:FGNX
Fg Nexus — 1347 Property Insurance Holdings — IPO Roadshow (June 2014)
28 slides from Fg Nexus's IPO roadshow presentation, Jun 3, 2014
Slide 1: June 2014 Investor Presentation
June 2014 Investor Presentation
Slide 2: Safe Harbor
Safe Harbor 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 expectations of the Company and its management about t
Slide 3: Company snapshot: ticker, price, market cap
Ticker (NASDAQ: PIH) Stock Price $8.81 (as of 5/30/ 2014) Shares Outstanding 3.48 million Market Cap $30.7 million (as of 5/30/2014) Sector/Industry Insurance A homeowners’ insurance company in states where we believe there is a significant potential for generating high returns on equity with contro
Slide 4: Offering Summary
Offering Summary Issuer 1347 Property Insurance Holdings, Inc. (“PIH”) Insurance Subsidiary Maison Insurance Company (“Maison”) Exchange / Ticker Nasdaq: PIH Shares Offered 2,497,162 Over - allotment Option 374,574 Use of Proceeds* • Approximately $ 3 . 3 million for general corporate purposes, incl
Slide 5: Offering Rationale and Expected Capital Allocation
Offering Rationale Expected Capital Allocation Company is seeking additional capital to accelerate the growth of PIH through: • Increase surplus to continue growth in policy holders in Louisiana • Explore start - up possibilities to rapidly expand into other states • Initial Target Markets – Florida
Slide 6: Management Background
Management Background • Current management team founded the Company in 2012 on the premise of leveraging years of experience in markets where there is a substantive need for well - run insurance carriers • Over 100 years of combined homeowners’ insurance experience in coastal states Gordon G. Pratt
Slide 7: Management's Criteria: Targeting the Correct Markets
Management’s Criteria ~ Targeting the Correct Markets Creating a homeowners’ insurance company in states where we believe there is a significant potential for generating high returns on equity with controlled risk Market Criteria Includes: • Target states with high property premiums in U . S . ~ har
Slide 8: Compelling Investment Opportunity
Compelling Investment Opportunity Integrated Insurance Company Targeting High Potential Markets Management Team with Experience Establishing and Managing Coastal Business Favorable Reinsurance Market Plan for Expansion into Florida, Texas and Hawaii 8
Slide 9: 1347 Property Insurance Holdings
1347 PROPERTY INSURANCE HOLDINGS
Slide 10: Business Overview: What is PIH
Business Overview ~ What is PIH • PIH is a holding company that owns an admitted property and casualty insurance company based in Louisiana, doing business as Maison Insurance Company and a managing general agency (MGA) doing business in Louisiana, Maison Managers Inc . • Maison Insurance Company pr
Slide 11: Company History
Company History * Approximately 2,500 remain in force as of 12/31/2013 11 2012 2013 2014 Maison Insurance Company is Formed in October 2012 December 2012 Maison participates in Louisiana "wind/ hail-only" depopulation from Citizens, LA's state run insurer December 2013 Maison assumes approximately 3
Slide 12: Louisiana: An Ideal Initial Market to Operate In
Louisiana ~ An Ideal Initial Market to Operate In • Among the high est overall property insurance rates in the country • Low loss costs and attritional (non - catastrophe) loss ratios • Wind/hail - only policies are limited to providing coverage for these types of weather • Favorable regulatory envi
Slide 13: Assuming Policies From Citizens: How it Works
Assuming Policies From Citizens ~ How it Works Louisiana Citizens Property Insurance Company, or Citizens • Citizens c urrently writes homeowners insurance for approximately 7 % of Louisiana properties as an insurer of last resort • The state of Louisiana implemented an insurance “take - out” progra
Slide 14: Effective Distribution: Multiple Methods of Increasing Policy Base
Effective Distribution ~ Multiple Methods of Increasing Policy Base • Since its founding, Company has established a network of agents throughout the state of Louisiana • Focus on service and quality claims handling • Company has seen steady organic policy growth since entering independent agency mar
Slide 15: Disciplined Underwriting Practices
Disciplined Underwriting Practices • Develop products tailored for the Louisiana market • Utilize technology to adequately assess insurance to value • Physically inspect every insured risk written organically through independent agents • Use of credit • Manage catastrophe risks through reinsurance,
Slide 16: Reinsurance Rates Continue to Improve
Reinsurance Rates Continue to Improve • Reinsurance brokers predict increased reinsurance capacity and lower prices “At July 1, we saw continued significant decreases in U.S. property catastrophe program pricing.” – David Flandor, Global Head of Business Intelligence at Guy Carpenter Referring t
Slide 17: Significant Reinsurance Coverage for Small Policy Base
• Company has created a reinsurance program focused on preserving capital • Expects to utilize traditional reinsurance and the insurance - linked securities market to minimize reinsurance costs with 1 - in - 100 year event coverage and reinstatements Significant Reinsurance Coverage for Small Policy
Slide 18: Growth Strategy
Pad 1347 PROPERTY INSURANCE HOLDINGS Growth Strategy
Slide 19: 2014 – Expansion into Other Coastal States
2014 – Expansion into Other Coastal States PIH intends, either through acquisition or organically, to expand into other coastal states that fit their selection criteria Hawaii Texas Florida Improving Legislative Environment Company would seek homeowners and “wind - only” policies and other underserv
Slide 20: Market Opportunities
Market Opportunities The following represents the approximate aggregate industry premiums for targeted markets in the states that PIH anticipates writing (in millions): PIH’s goal is to capture between 2% and 3% of the Louisiana market in its first three years of operation State Aggregate Premium in
Slide 21: Selected Quarterly Financial Data
Selected Quarterly Financial Data 2014 2013 (in thousands, expect per - share amounts) 1 st Quarter 4 th Quarter 3 rd Quarter 2 nd Quarter 1 st Quarter 2013 Year Total Revenues $ 4,173 $ 2,562 $ 1,060 $ 533 $ 936 $ 5,091 Total Expenses 1,866 1,531 979 1,319 2,406 6,235 Income (loss) before income ta
Slide 22: Peer Comparables – Publicly-held Homeowners' Insurance Companies
Peer Comparables – Publicly - held Homeowners’ Insurance Companies * Capital IQ 22 (figures in millions, except per share data) Price (1) LTM Company Ticker @ 06/02/14 Market Cap Price/ Book Value LTM P/E Universal Insurance Holdings Inc. UVE $12.49 $439.5 2.4 x 7.5 x HCI Group, Inc. HCI $38.77 $439
Slide 23: Investment Considerations
Investment Considerations • A homeowners’ insurance company focused on market geographies with addressable needs • Dedicated management team with experience launching and rapidly expanding coastal insurance companies Remaining focused on the markets we know • Clean balance sheet with no legacy iss
Slide 24: Contact Us For Additional Information
Contact Us For Additional Information At The Company Doug Raucy Chief Executive Officer draucy@maisonins.com Investor Relations The Equity Group Adam Prior Senior Vice President aprior@equityny.com 24
Slide 25: Appendix: Financial Statements
Appendix: Financial Statements
Slide 26: Consolidated Balance Sheet
Consolidated Balance Sheet (in thousands) March 31, 2014 December 31, 2013 Assets ( unaudited ) Investments: Fixed income securities, at fair value (amortized cost of $3,535 and $301, respectively) 3,530 301 Short - term investments pledged, at cost which approximates value $ 100 $ 100 Total investm
Slide 27: Consolidated Statement of Operations
(in thousands, unaudited) Three months ended March 31, 2014 2013 Revenues : Net premiums earned $ 4,114 $ 915 Net investment income 4 21 Other income 55 — Total revenues 4,173 936 Expenses : Net losses and loss adjustment expenses 384 1,847 Amortization of deferred policy acquisition costs 881 203 G
Slide 28: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows (in thousands, unaudited) Three months ended March 31, 2014 2013 Cash provided by (used in): Operating activities: Net income (loss) $ 1,703 $ (966 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Net deferred income taxe
1347 Property Insurance Holdings — IPO Roadshow (June 2014) on 6ix