American Coastal Insurance Corporation · NASDAQ:ACIC
American Coastal Insurance — United Insurance Holdings — Q2 2021 Earnings Presentation
17 slides from American Coastal Insurance's earnings presentation, Aug 4, 2021
Slide 1: United Insurance Holdings Corporation Investor Presentation
United Insurance Holdings Corporation (NASDAQ: UIHC) Investor Presentation August 4, 2021
Slide 2: Company Overview
Company Overview 2 UPC Insurance is a specialty underwriter of catastrophe exposed property insurance in the U.S. United Insurance Holding Corp. (NASDAQ: UIHC) was founded in 1999 and is the insurance holding company for 5 P&C carriers and operating affiliates operating under the brand UPC Insurance
Slide 3: Corporate Strategy
Corporate Strategy 3 We seek to be a top-quartile specialty underwriter of CAT exposed property insurance Innovative Reinsurance Programs & Long- Standing Partnerships Highly Specialized Coastal Underwriter Sophisticated Risk Selection and Exposure Management Proprietary, Scalable Technology to Pric
Slide 4: Q2-2021 Executive Summary
Q2-2021 Executive Summary 4 Reinsurance Renewal Successful Underwriting Improvements • Lowered retention and added aggregate stop-loss feature for named windstorm • Maintained cascading aggregate structure providing superior 1st event protection • Modest single digit risk-adjusted cost increase capt
Slide 5: Q2-2021 Results
Q2-2021 Results 5 Higher reinsurance and loss costs drove the y/y decline in core earnings Q2-21 Q2-20 Change Core income (loss) (24,636)$ 8,816$ -379.5% per diluted share (CEPS) (0.57)$ 0.20$ Included the following items Net current year catastrophe loss & LAE incurred 40,257$ 29,799$ Net (favorabl
Slide 6: Business Mix is Shifting
Business Mix is Shifting 6 We seek to grow Commercial and reduce Personal lines exposures over the next 3 years $687 $821 $890 $973 $1,064 $21 $220 $362 $407 $393 $708 $1,041 $1,252 $1,380 $1,457 2016 2017 2018 2019 2020 Personal Lines Commercial Lines GPW by Line of Business ($MMs) 20% CAGR 97% / 3
Slide 7: Comparison of Personal & Commercial Lines
Comparison of Personal & Commercial Lines 7 Commercial has consistently outperformed Personal Lines since our 2017 merger with AmCo Personal Lines Key Metrics (2020) Underlying Combined Ratio (1) Combined Ratio Commercial Lines Key Metrics (2020) $1.0B / $564MM GPE / NPE $84MM Underlying U / W Profi
Slide 8: Q2-2021 Results by Line of Business
Q2-2021 Results by Line of Business 8 Our Specialty Commercial Continues to Perform Well Personal Lines (PL) represents our homeowners’ business and is performing outside of Florida, but Commercial Lines (CL) is what we seek to grow $ in millions PL CL Total Gross Premiums Earned 254.8$ 101.6$ 356.4
Slide 9: Overview of Challenging Market Conditions
Overview of Challenging Market Conditions 9 Florida is the peak exposure zone in the world for windstorm where we have successfully operated since 1999 32 26 34 38 38 36 29 24 25 29 39 93 103 77 70 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 1 1 2 1 1 1 2 3 2 2 4 5 6 8
Slide 10: Higher Net AOP CAT Pressuring Results
Higher Net AOP CAT Pressuring Results 10 Reinsurance programs have responded, but exposure management is the long-term solution 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 1H-2016 1H-2017 1H-2018 1H-2019 1H-2020 1H-2021 Gross CAT Loss Ratio Net CAT Loss Ratio Losses ceded to our AOP CAT program have hel
Slide 11: Material Cost Increases Impacting Losses
Material Cost Increases Impacting Losses 11 Supply chain and inflation pressures have contributed to claims severity increases in 2021 Source: Xactimate
Slide 12: Our Response Creates a Foundation for Profitable Growth
Our Response Creates a Foundation for Profitable Growth 12 We are well positioned to take advantage of the hard market in CAT exposed property Robust Rate Increases Exposure Management Initiatives Litigation Management & Reform Superior Reinsurance The outlook for UPC’s earnings is bright and more s
Slide 13: Premium vs. Exposure Trending Favorably
Premium vs. Exposure Trending Favorably 13 Premium Goal = TIV Goal = We expect this gap to continue widening based on rate & exposure management actions
Slide 14: Personal Lines Renewal Rate Changes Sticking
Personal Lines Renewal Rate Changes Sticking 14 Q2 was our best quarter yet and almost reached $4.00 per $1K of TIV ~$9M per month run rate Renewal Retention Rate Holding Strong All Personal Lines Metric 2020 Q3 2020 Q4 2021 Q1 2021 Q2 Renewing Policies 114,162 94,765 96,261 117,616 Renewal Acceptan
Slide 15: Our ESG Approach
Our ESG Approach 15 We believe an effective ESG strategy leads to improved decision making, associate engagement, and results over time UPC Insurance has created a culture where people are empowered to address risks as they emerge. Motivated people combined with a strong corporate culture is the Com
Slide 16: Cautionary Statements
Cautionary Statements 16 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, investme
Slide 17: UPC Insurance
UPCZ® INSURANCE
United Insurance Holdings — Q2 2021 Earnings Presentation on 6ix