NASDAQ:CNFR Conifer Q3 2023 Earnings Report $0.69 -0.05 (-6.76%) Closing price 05/7/2025 03:53 PM EasternExtended Trading$0.72 +0.03 (+4.93%) As of 05/7/2025 05:10 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings History Conifer EPS ResultsActual EPS-$0.41Consensus EPS $0.02Beat/MissMissed by -$0.43One Year Ago EPSN/AConifer Revenue ResultsActual Revenue$28.12 millionExpected Revenue$25.27 millionBeat/MissBeat by +$2.85 millionYoY Revenue GrowthN/AConifer Announcement DetailsQuarterQ3 2023Date11/9/2023TimeN/AConference Call DateFriday, November 10, 2023Conference Call Time8:30AM ETUpcoming EarningsConifer's Q1 2025 earnings is scheduled for Monday, May 12, 2025, with a conference call scheduled on Wednesday, May 14, 2025 at 8:30 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Conifer Q3 2023 Earnings Call TranscriptProvided by QuartrNovember 10, 2023 ShareLink copied to clipboard.There are 6 speakers on the call. Operator00:00:00Morning, and welcome to the Conifer Holdings Third Quarter 2023 Investor Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Brian Rohney. Operator00:00:22Please go ahead. Speaker 100:00:24Thank you, and good morning, everyone. Conifer issued its 2023 Q3 financial results after the close of market yesterday. You can find copies of the earnings release on the company's website, ir. Cnfrh.com. The slide presentation accompanying management's remarks this morning is available to view or download via webcast or from the Investor Relations section of Conifer's website. Speaker 100:00:51Before we get started, please note that except with regard to historical information, Statements made in this conference call may constitute forward looking statements within the meaning of the federal securities laws, including statements relating to trends, the company's operations and financial results and the business and the products of the company and its subsidiaries. Actual results may differ materially from the results anticipated in these forward looking statements due to various risks and uncertainties Underlying are forward looking statements as described from time to time in Conifer's filings with the SEC, including our latest Form 10 ks and subsequent reports. Conifer specifically disclaims any obligation to update or revise any forward looking statements whether as a result of new information, future developments or otherwise. In addition, a replay of this call will be provided through a link on the Investor Relations section of our website. During this call, we'll also discuss non GAAP financial measures as defined by SEC Regulation G. Speaker 100:01:57Reconciliations of these non GAAP financial measures to the comparable GAAP financial measures are included when possible In our earnings release and our historical SEC filings, statutory accounting data is prepared in accordance with statutory accounting rules and is therefore not Reconciled to GAAP. We will conduct a Q and A session after management's prepared remarks this morning. With that, I'll turn the call over to Jim Peckoff, Executive Chairman and Co Chief Executive Officer. Jim? Speaker 200:02:28Thanks, Brian, and good morning, everyone. Also on the call with me today are Nick and Harold. Thank you for joining us today to discuss our Q3 financial results. Like the industry at large where personal lines has had a tough go, our quarter was mostly impacted by recent storm activity. After several years of systemic wind exposure reduction, for example, exiting Florida altogether or our hurricane risk is now almost negligible. Speaker 200:02:59Yet in the quarter, we were significantly impacted by wind in the form of convective storm. More specifically, our personal lines book of business was hit the hardest in Oklahoma. But before the storm activity in the period, we were generally pleased with the improving results. For example, Historically profitable core business, which continues to generate substantial top line growth in our emphasized key specialty verticals. We remain focused on executing in our historically profitable lines, which I believe speaks to the strength of our underwriting teams and their deep While the top line has been moving, we are also pleased to see the expense ratio coming into line with our ongoing expense management efforts. Speaker 200:04:01We posted a 34% expense ratio for the Q3. This continuous improvement demonstrates our persistent drive toward overall expense reduction. Before I hand the call over to Nick for more color on our underwriting results, I'd like to take a moment to note the transition that will take place at the end of this year where Nick will be taking over the role of CEO for Conifer. I'm proud to hand the reins over to Nick and I'm confident that the company is in good hands and on sound footing moving into a Nick? Speaker 300:04:32Thank you, Jim. I am genuinely excited to take on the role as well as the opportunities and challenges that lie ahead for Conifer. As Jim noted, Conifer's long term prospects appear bright and improving in no small part due to the strategic direction and operational Commitment of continuously refining our overall business mix over the last several years. You've heard us talk about this before, but we're in an Even better positioned today than days gone by, and I'm pleased to see the collective team effort coming to ultimate fruition. Over the past Few years, our underwriting teams have been keenly concentrating on refining our business mix, narrowly focusing on those select specialty lines where we have a distinct competitive advantage and where we see logical growth and historical profitability. Speaker 300:05:15By focusing these key select verticals And maximizing the advantage of our team's underwriting experience, our efforts are optimized for lines of business where we have deep knowledge coupled with a proven track record. Gross written premiums for the Q3 were over $38,000,000 a 17% increase compared to the prior year period. This increase resulted from organic growth in our select operating verticals combined with ongoing rate increases. The primary driver for our Top line continues to be commercial lines business, which accounted for roughly 75% of total gross written premium in the period. In spite of planned premium reductions like in the State of Florida, our Commercial Lines production was still up 3% in the quarter to $28,000,000 Within Commercial Lines, our small business segment shows great potential for continued strong performance and comprised the majority of gross written premium for the quarter. Speaker 300:06:08Our Personal Lines business stands at just over 25% of total gross written premium for the Q3. Low value home and dwelling Insurance products are the main driver of the Personal Lines gross written premium, which in total was $10,000,000 for the 3rd quarter. While our business in Oklahoma has performed generally well over the last several years, it did severely impact our financials over the last couple of quarters, leading us to decide to non renew that book of business. In contrast, our low value dwelling book has continued to perform very well, including storms, posting a 53% loss ratio through 9 months this year. Before the impact of storm related losses, the personal lines accident year combined ratio was 91% for the 3rd Quarter of 2023 90% for the 1st 9 months of the year. Speaker 300:06:53Overall, when looking at our combined ratio before the impact of storm losses, The company's accident year combined ratio was 95% for the Q3. This highlights the fundamental strength of our book and demonstrates our commitment to attentive pricing practices and responsible claims management. As the effect of this quarter's storm related losses clears a way to reveal the strong foundation below, we The financial results to reflect improved combined ratios going forward. By devoting our efforts to the best performing lines of business, especially in our key select verticals, The company will continue to drive toward long term profitability. With that, I'll turn the call over to Harold to discuss the financials. Speaker 400:07:31Thank you, Nick. I'll provide a quick recap of the financial results, and I encourage investors to review our filings and presentation on the company's website for greater detail. As noted, gross written premiums increased 17% to just under $39,000,000 in the 3rd quarter. For the quarter, our overall combined ratio was 121%, due in large part to the elevated storm activity Nick and Jim noted in their remarks. Before the impact of the additional loss emergence from the 2nd quarter storm activity, Conifer's accident year combined ratio was 95% in the 3rd quarter. Speaker 400:08:11The loss ratio was 87% for the Again largely resulting from the convective storms that impacted much of the industry. This quarter's expense ratio was 34%, down 600 basis points from the same period last year and beating our target expense ratio of 35%. Despite lower net earned premiums, we continue to see the expense ratio improve as a result of our ongoing expense reduction efforts. Net investment income was $1,500,000 during the quarter, up 69% from 180 from $860,000 in the prior year period. For the 1st 9 months of 2023, net investment income was up 113% over last year to $4,100,000 Our investments remain conservatively managed With the vast majority of our investable assets in fixed income securities with an average credit quality of AA plus An average duration of 2.8 years and a growing tax equivalent yield of 2.9%. Speaker 400:09:20Also, we have a sizable portion of our investable assets in T Bills and Adjustable Floaters. Largely as a result of the $2,500,000 in storm losses in the 3rd quarter, the company reported a net loss of $2,700,000 or $0.22 per share compared to a net loss of $1,500,000 or $0.14 per share in the prior year period. Moving to the balance sheet, total assets were $293,000,000 atquarterend with cash and total investments of 159,000,000 Our book value at quarter end was $0.96 per share. We have a $1.96 per share in net deferred tax assets that Due to a full valuation allowance were not reflected in book value. And with that, I'd like to turn it back over to Jim for closing remarks. Speaker 200:10:11Thanks, Harold and Nick. In closing, I want to emphasize that we as we move forward, I remain confident in Conifer's ability to deliver long term value to our shareholders. I look forward to helping Nick in his new role in any way I can. With that, I'd like to invite any questions. Operator? Operator00:10:28Thank you. We will now begin the question and answer session. At this time, we'll pause momentarily to assemble our roster. And our first question comes from Paul Newsome from Piper Sandler. Please go ahead. Speaker 500:10:54Good morning. Thanks for the call. Congratulations to Nick for the position. I I was hoping you could start with the transaction that you did with Core Specialty and how you think that will affect Results prospectively? Speaker 200:11:14Well, I'll start. We did the in order to Consolidate the writings a little bit and delever the company. We looked at what the Cost was of the business that we had and the acquisition cost of that business was high for us due to the front fee and it was our higher loss ratio business That we had left on the books. So with that being gone, it enhances the statutory Strength of the insurance companies, so we look to that transaction to put us in a position to write the other business More efficiently and with less acquisition costs. But that's my view of it. Speaker 200:11:58Nick? Speaker 300:11:59No, I agree. Primarily, it bolsters the surplus level. The book was growing pretty substantially. As Jim mentioned, the acquisition costs were the highest Throughout the company, and we thought that the limits profiles were also very high. So from a reinsurance perspective, it was also costly. Speaker 300:12:19And we thought it made the most sense to move away from that book for all of those factors. Speaker 200:12:26So Speaker 500:12:29It looks like it was roughly a third of your gross premiums. So I assume that that There's no replacement for that. So prospectively, we should basically assume your gross premiums are up by a third and Impact on earned revenue should be what earned in or is I think they bought the premium business. So The UPR. The UPR. Speaker 500:12:54So I would guess that next quarter you're basically looking for a third less revenues, Is that fairly right, roughly? Speaker 300:13:07Yes. In the near term, we will see a dip As a result of the transaction, obviously, we see growth in other areas, so that will offset the decline out of that book of business. So yes, in the near term, we will see A decline in the premiums. Speaker 500:13:24I would guess, but I don't know this is certain because it happened at the end of the quarter. There was a difference between what you reported from a gross premiums perspective and a net written It was fairly unusual. Is that the transaction happening that Affected that very low written net written premium number in the 3rd quarter? Speaker 400:13:49Yes, absolutely. This is Harold. It's When we ceded the unearned premium, that was about $30,000,000 of unearned premium. So that shows up as ceded written. Now that does not affect any net earned premium for the Q3, but does affect cededwritten and netwritten. Operator00:14:25There are no more questions in the queue. This concludes our question and answer session. I would like to turn the conference back over to Jim Petcoff for any closing remarks. Speaker 200:14:34Thank you, everyone. We appreciate your interest in the company and we look forward to seeing you in the future. If you have any questions, please feel free to reach out to us. Thank Operator00:14:46The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallConifer Q3 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) Conifer Earnings Headlines3 Penny Stocks With Market Caps As Low As $5MApril 10, 2025 | finance.yahoo.comConifer Holdings, Inc.: Conifer Holdings Reports 2024 Fourth Quarter and Year End Financial ResultsMarch 29, 2025 | finanznachrichten.deThink NVDA’s run was epic? You ain’t seen nothin’ yetAsk most investors and they’ll probably tell you Nvidia is the undisputed AI stock of the decade. In 2023, it surged 239%. And in 2024, it soared another 171% on the year… But what if I told you there was a way to target those types of “peak Nvidia” profit opportunities in 24 hours or less?May 8, 2025 | Timothy Sykes (Ad)Conifer Holdings Reports 2024 Fourth Quarter and Year End Financial ResultsMarch 28, 2025 | globenewswire.comConifer Holdings Inc.December 24, 2024 | wsj.comConifer Holdings Secures Leadership with Extended ContractsDecember 19, 2024 | tipranks.comSee More Conifer Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Conifer? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Conifer and other key companies, straight to your email. Email Address About ConiferConifer (NASDAQ:CNFR), an insurance holding company, engages in the sale of property and casualty insurance products. The company offers insurance coverage in specialty commercial and personal product lines. It also underwrites various specialty insurance products, including property, general liability, liquor liability, automobile, and homeowners and dwelling policies. The company serves the commercial insurance needs of owner-operated businesses in the markets, such as hospitality, which includes restaurants, bars, taverns, and bowling centers, as well as small grocery and convenience stores; artisan contractors comprising plumbers, painters, carpenters, electricians, and other independent contractors; and security service providers, including companies that provide security guard services, security alarm products and services, and private investigative services. It offers specialty homeowners insurance products, such as low- value dwelling insurance tailored for owners of lower valued homes in Illinois, Indiana, Louisiana, and Texas; and wholesale agency services comprising commercial and personal lines insurance products for its insurance company subsidiaries, as well as third party insurers. Conifer Holdings, Inc. markets and sells its insurance products through a network of independent agents in 50 states in the United States. The company was incorporated in 2009 and is headquartered in Troy, Michigan.View Conifer ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Disney Stock Jumps on Earnings—Is the Magic Sustainable?Archer Stock Eyes Q1 Earnings After UAE UpdatesFord Motor Stock Rises After Earnings, But Momentum May Not Last Broadcom Stock Gets a Lift on Hyperscaler Earnings & CapEx BoostPalantir Stock Drops Despite Stellar Earnings: What's Next?Is Eli Lilly a Buy After Weak Earnings and CVS-Novo Partnership?Is Reddit Stock a Buy, Sell, or Hold After Earnings Release? Upcoming Earnings Enbridge (5/9/2025)Petróleo Brasileiro S.A. - Petrobras (5/12/2025)Simon Property Group (5/12/2025)JD.com (5/13/2025)NU (5/13/2025)Sony Group (5/13/2025)SEA (5/13/2025)Cisco Systems (5/14/2025)Toyota Motor (5/14/2025)NetEase (5/15/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. Start Your 30-Day Trial MarketBeat All Access Features Best-in-Class Portfolio Monitoring Get personalized stock ideas. Compare portfolio to indices. Check stock news, ratings, SEC filings, and more. Stock Ideas and Recommendations See daily stock ideas from top analysts. Receive short-term trading ideas from MarketBeat. Identify trending stocks on social media. Advanced Stock Screeners and Research Tools Use our seven stock screeners to find suitable stocks. Stay informed with MarketBeat's real-time news. Export data to Excel for personal analysis. Sign in to your free account to enjoy these benefits In-depth profiles and analysis for 20,000 public companies. Real-time analyst ratings, insider transactions, earnings data, and more. Our daily ratings and market update email newsletter. Sign in to your free account to enjoy all that MarketBeat has to offer. Sign In Create Account Your Email Address: Email Address Required Your Password: Password Required Log In or Sign in with Facebook Sign in with Google Forgot your password? Your Email Address: Please enter your email address. Please enter a valid email address Choose a Password: Please enter your password. Your password must be at least 8 characters long and contain at least 1 number, 1 letter, and 1 special character. Create My Account (Free) or Sign in with Facebook Sign in with Google By creating a free account, you agree to our terms of service. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
There are 6 speakers on the call. Operator00:00:00Morning, and welcome to the Conifer Holdings Third Quarter 2023 Investor Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Brian Rohney. Operator00:00:22Please go ahead. Speaker 100:00:24Thank you, and good morning, everyone. Conifer issued its 2023 Q3 financial results after the close of market yesterday. You can find copies of the earnings release on the company's website, ir. Cnfrh.com. The slide presentation accompanying management's remarks this morning is available to view or download via webcast or from the Investor Relations section of Conifer's website. Speaker 100:00:51Before we get started, please note that except with regard to historical information, Statements made in this conference call may constitute forward looking statements within the meaning of the federal securities laws, including statements relating to trends, the company's operations and financial results and the business and the products of the company and its subsidiaries. Actual results may differ materially from the results anticipated in these forward looking statements due to various risks and uncertainties Underlying are forward looking statements as described from time to time in Conifer's filings with the SEC, including our latest Form 10 ks and subsequent reports. Conifer specifically disclaims any obligation to update or revise any forward looking statements whether as a result of new information, future developments or otherwise. In addition, a replay of this call will be provided through a link on the Investor Relations section of our website. During this call, we'll also discuss non GAAP financial measures as defined by SEC Regulation G. Speaker 100:01:57Reconciliations of these non GAAP financial measures to the comparable GAAP financial measures are included when possible In our earnings release and our historical SEC filings, statutory accounting data is prepared in accordance with statutory accounting rules and is therefore not Reconciled to GAAP. We will conduct a Q and A session after management's prepared remarks this morning. With that, I'll turn the call over to Jim Peckoff, Executive Chairman and Co Chief Executive Officer. Jim? Speaker 200:02:28Thanks, Brian, and good morning, everyone. Also on the call with me today are Nick and Harold. Thank you for joining us today to discuss our Q3 financial results. Like the industry at large where personal lines has had a tough go, our quarter was mostly impacted by recent storm activity. After several years of systemic wind exposure reduction, for example, exiting Florida altogether or our hurricane risk is now almost negligible. Speaker 200:02:59Yet in the quarter, we were significantly impacted by wind in the form of convective storm. More specifically, our personal lines book of business was hit the hardest in Oklahoma. But before the storm activity in the period, we were generally pleased with the improving results. For example, Historically profitable core business, which continues to generate substantial top line growth in our emphasized key specialty verticals. We remain focused on executing in our historically profitable lines, which I believe speaks to the strength of our underwriting teams and their deep While the top line has been moving, we are also pleased to see the expense ratio coming into line with our ongoing expense management efforts. Speaker 200:04:01We posted a 34% expense ratio for the Q3. This continuous improvement demonstrates our persistent drive toward overall expense reduction. Before I hand the call over to Nick for more color on our underwriting results, I'd like to take a moment to note the transition that will take place at the end of this year where Nick will be taking over the role of CEO for Conifer. I'm proud to hand the reins over to Nick and I'm confident that the company is in good hands and on sound footing moving into a Nick? Speaker 300:04:32Thank you, Jim. I am genuinely excited to take on the role as well as the opportunities and challenges that lie ahead for Conifer. As Jim noted, Conifer's long term prospects appear bright and improving in no small part due to the strategic direction and operational Commitment of continuously refining our overall business mix over the last several years. You've heard us talk about this before, but we're in an Even better positioned today than days gone by, and I'm pleased to see the collective team effort coming to ultimate fruition. Over the past Few years, our underwriting teams have been keenly concentrating on refining our business mix, narrowly focusing on those select specialty lines where we have a distinct competitive advantage and where we see logical growth and historical profitability. Speaker 300:05:15By focusing these key select verticals And maximizing the advantage of our team's underwriting experience, our efforts are optimized for lines of business where we have deep knowledge coupled with a proven track record. Gross written premiums for the Q3 were over $38,000,000 a 17% increase compared to the prior year period. This increase resulted from organic growth in our select operating verticals combined with ongoing rate increases. The primary driver for our Top line continues to be commercial lines business, which accounted for roughly 75% of total gross written premium in the period. In spite of planned premium reductions like in the State of Florida, our Commercial Lines production was still up 3% in the quarter to $28,000,000 Within Commercial Lines, our small business segment shows great potential for continued strong performance and comprised the majority of gross written premium for the quarter. Speaker 300:06:08Our Personal Lines business stands at just over 25% of total gross written premium for the Q3. Low value home and dwelling Insurance products are the main driver of the Personal Lines gross written premium, which in total was $10,000,000 for the 3rd quarter. While our business in Oklahoma has performed generally well over the last several years, it did severely impact our financials over the last couple of quarters, leading us to decide to non renew that book of business. In contrast, our low value dwelling book has continued to perform very well, including storms, posting a 53% loss ratio through 9 months this year. Before the impact of storm related losses, the personal lines accident year combined ratio was 91% for the 3rd Quarter of 2023 90% for the 1st 9 months of the year. Speaker 300:06:53Overall, when looking at our combined ratio before the impact of storm losses, The company's accident year combined ratio was 95% for the Q3. This highlights the fundamental strength of our book and demonstrates our commitment to attentive pricing practices and responsible claims management. As the effect of this quarter's storm related losses clears a way to reveal the strong foundation below, we The financial results to reflect improved combined ratios going forward. By devoting our efforts to the best performing lines of business, especially in our key select verticals, The company will continue to drive toward long term profitability. With that, I'll turn the call over to Harold to discuss the financials. Speaker 400:07:31Thank you, Nick. I'll provide a quick recap of the financial results, and I encourage investors to review our filings and presentation on the company's website for greater detail. As noted, gross written premiums increased 17% to just under $39,000,000 in the 3rd quarter. For the quarter, our overall combined ratio was 121%, due in large part to the elevated storm activity Nick and Jim noted in their remarks. Before the impact of the additional loss emergence from the 2nd quarter storm activity, Conifer's accident year combined ratio was 95% in the 3rd quarter. Speaker 400:08:11The loss ratio was 87% for the Again largely resulting from the convective storms that impacted much of the industry. This quarter's expense ratio was 34%, down 600 basis points from the same period last year and beating our target expense ratio of 35%. Despite lower net earned premiums, we continue to see the expense ratio improve as a result of our ongoing expense reduction efforts. Net investment income was $1,500,000 during the quarter, up 69% from 180 from $860,000 in the prior year period. For the 1st 9 months of 2023, net investment income was up 113% over last year to $4,100,000 Our investments remain conservatively managed With the vast majority of our investable assets in fixed income securities with an average credit quality of AA plus An average duration of 2.8 years and a growing tax equivalent yield of 2.9%. Speaker 400:09:20Also, we have a sizable portion of our investable assets in T Bills and Adjustable Floaters. Largely as a result of the $2,500,000 in storm losses in the 3rd quarter, the company reported a net loss of $2,700,000 or $0.22 per share compared to a net loss of $1,500,000 or $0.14 per share in the prior year period. Moving to the balance sheet, total assets were $293,000,000 atquarterend with cash and total investments of 159,000,000 Our book value at quarter end was $0.96 per share. We have a $1.96 per share in net deferred tax assets that Due to a full valuation allowance were not reflected in book value. And with that, I'd like to turn it back over to Jim for closing remarks. Speaker 200:10:11Thanks, Harold and Nick. In closing, I want to emphasize that we as we move forward, I remain confident in Conifer's ability to deliver long term value to our shareholders. I look forward to helping Nick in his new role in any way I can. With that, I'd like to invite any questions. Operator? Operator00:10:28Thank you. We will now begin the question and answer session. At this time, we'll pause momentarily to assemble our roster. And our first question comes from Paul Newsome from Piper Sandler. Please go ahead. Speaker 500:10:54Good morning. Thanks for the call. Congratulations to Nick for the position. I I was hoping you could start with the transaction that you did with Core Specialty and how you think that will affect Results prospectively? Speaker 200:11:14Well, I'll start. We did the in order to Consolidate the writings a little bit and delever the company. We looked at what the Cost was of the business that we had and the acquisition cost of that business was high for us due to the front fee and it was our higher loss ratio business That we had left on the books. So with that being gone, it enhances the statutory Strength of the insurance companies, so we look to that transaction to put us in a position to write the other business More efficiently and with less acquisition costs. But that's my view of it. Speaker 200:11:58Nick? Speaker 300:11:59No, I agree. Primarily, it bolsters the surplus level. The book was growing pretty substantially. As Jim mentioned, the acquisition costs were the highest Throughout the company, and we thought that the limits profiles were also very high. So from a reinsurance perspective, it was also costly. Speaker 300:12:19And we thought it made the most sense to move away from that book for all of those factors. Speaker 200:12:26So Speaker 500:12:29It looks like it was roughly a third of your gross premiums. So I assume that that There's no replacement for that. So prospectively, we should basically assume your gross premiums are up by a third and Impact on earned revenue should be what earned in or is I think they bought the premium business. So The UPR. The UPR. Speaker 500:12:54So I would guess that next quarter you're basically looking for a third less revenues, Is that fairly right, roughly? Speaker 300:13:07Yes. In the near term, we will see a dip As a result of the transaction, obviously, we see growth in other areas, so that will offset the decline out of that book of business. So yes, in the near term, we will see A decline in the premiums. Speaker 500:13:24I would guess, but I don't know this is certain because it happened at the end of the quarter. There was a difference between what you reported from a gross premiums perspective and a net written It was fairly unusual. Is that the transaction happening that Affected that very low written net written premium number in the 3rd quarter? Speaker 400:13:49Yes, absolutely. This is Harold. It's When we ceded the unearned premium, that was about $30,000,000 of unearned premium. So that shows up as ceded written. Now that does not affect any net earned premium for the Q3, but does affect cededwritten and netwritten. Operator00:14:25There are no more questions in the queue. This concludes our question and answer session. I would like to turn the conference back over to Jim Petcoff for any closing remarks. Speaker 200:14:34Thank you, everyone. We appreciate your interest in the company and we look forward to seeing you in the future. If you have any questions, please feel free to reach out to us. Thank Operator00:14:46The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.Read morePowered by