NASDAQ:CNFR Conifer Q2 2024 Earnings Report $0.70 -0.04 (-5.54%) As of 11:21 AM Eastern This is a fair market value price provided by Polygon.io. Learn more. Earnings History Conifer EPS ResultsActual EPS-$0.30Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/AConifer Revenue ResultsActual Revenue$26.85 millionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/AConifer Announcement DetailsQuarterQ2 2024Date8/13/2024TimeN/AConference Call DateWednesday, August 14, 2024Conference 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 Q2 2024 Earnings Call TranscriptProvided by QuartrAugust 14, 2024 ShareLink copied to clipboard.There are 5 speakers on the call. Operator00:00:00and welcome to Conifer Holdings Second Quarter 2024 Investor Conference 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 Roney. Operator00:00:24Please go ahead. Speaker 100:00:26Thank you, and good morning, everyone. Conifer issued its 2024 second quarter financial results after the close of market yesterday. You can find copies of the earnings release on the company's website at 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. Before 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. Speaker 100:01:16Actual results may differ materially from the results anticipated in these forward looking statements due to various risks and uncertainties underlying our 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 due to 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. Reconciliations 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. Speaker 100:02:11Statutory 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 Nick Preckhauf, our Chief Executive Officer. Nick? Speaker 200:02:29Thanks, Brian, and good morning, everyone. Also on the call with us today is Harold Meloche. As you review our Q2 results, you'll notice a significant change in our top line figures. This is a deliberate and strategic decision on our part as we continue our shift towards a commission based revenue model, channeling premium through our wholly owned managing general agency Conifer Insurance Services. Our focus is on ramping up the optimization of our commercial lines by running gross written premium through our MGA. Speaker 200:03:00This move aligns with our long term strategy to achieve more stable and predictable revenue streams through commissions rather than the traditional risk bearing carrier revenue model. While this has resulted in a lower top line compared to previous periods, it is a critical step in enhancing our overall profitability and creating a more scalable and sustainable business model. Under this model, we can leverage the expertise and network of our agency partners, enhancing our distribution channels and expanding our reach in key markets. Through this approach, our business is directly written by 3rd party insurers with AM Best ratings of A minus or better. Utilizing 3rd party A rated capacity providers for MGA produced business provides a much broader reach for existing profitable programs, enabling us to offer insured superior coverage in paper, while simultaneously governing risk through a scalable and sustainable production based revenue model. Speaker 200:03:55During the Q2 of 2024, we made significant strides in channeling premiums to our capacity providers across various commercial lines of business. Specifically, we have started to accelerate the transfer of cannabis premiums to our capacity partner Palomar, enabling us to expand into new markets and solidify our position as a leading provider of cannabis related coverage across the U. S. As planned, our commercial lines production decreased significantly in the Q2 compared to the prior year period. This is largely the result of more time required to ramp up our other complementary capacity providers in the period. Speaker 200:04:29For the quarter, our commercial lines combined ratio came in at 105% and the accident year combined ratio was a solid 81%. Overall, commercial lines represented roughly 36% of total production for the quarter. Switching to our Personal Alliance, these results were significantly impacted in the quarter by spring storms. Most of the loss came from our Oklahoma business, which is currently in runoff. We expect that the runoff process will be largely completed by year end. Speaker 200:04:59With Oklahoma going away, our production for this segment will primarily come from low valued homeowners business in Texas and the Midwest. In general, personalized production was retained through our traditional carrier based revenue model and represented a larger percentage of gross written premium in the 2nd quarter. We expect this trend to continue in the quarters ahead as we further transition our revenue model. Overall, we remain confident that this approach will yield market benefits over time, not only improving our margins, but also equipping us to better serve our insurance and agency partners with a more flexible and responsive offering. As we continue this transition, we remain committed to preserving a strong and consistent top line, continuing to streamline our expense structure and generating operational profitability over the long term to achieve favorable returns for our shareholders. Speaker 200:05:51With that, I'll turn the call over to Harold to discuss the numbers. Harold? Speaker 300:05:54Thank you, Nick. I'll provide a brief recap of the financial results and I encourage investors to review our filings and presentation on the company's website for further detail. In the Q2, overall gross written premium decreased 58% to $19,000,000 reflecting our decision to reduce premium leverage on our operating subsidiaries and to focus instead on the commission based revenue through our MGA Conifer Insurance Services. The breakout for 2nd quarter total gross written premium was 36% commercial lines and 64% personal lines. Overall, Conifer's combined ratio was 124% in the 2nd quarter, which was impacted by the Oklahoma storms. Speaker 300:06:41We stopped writing Oklahoma Premium in May, which should reduce which should result in improved mix of business of homeowners going forward. Our expense ratio continues to improve despite lower net earned premiums due to the success of our ongoing expense reduction efforts. The expense ratio was 32% in the 2nd quarter, down 580 basis points from the same period last year and well below our near term target of 35%. Agency commission in the 2nd quarter was nearly $9,000,000 compared to $211,000 in the Q2 of 2023, illustrating the progress the company has made in its initiative to drive commission based revenue and shift to a managing general agency business model. Net investment income was $1,500,000 during the 2nd quarter, up 11% from $1,400,000 in the prior year period. Speaker 300:07:42We recorded $196,000 decrease in the fair value of equity investments in the 2nd quarter, leading to a net realized investment loss of $118,000 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 on average duration of 2.6 years and a tax equivalent yield of 3.4%. Our company reported net loss allocable to common shareholders of $4,000,000 or $0.32 per share and adjusted operating loss of $3,600,000 or $0.30 per share for the Q2 of 2024. Moving to the balance sheet, total assets were $293,000,000 at quarter end with cash and total investments of 154,000,000 dollars And with that, I'd like to turn it back over to Nick for closing remarks. Speaker 200:08:40Thanks, Harold. In summary, as we wrap up, this strategic shift is positioning us for stronger, more sustainable growth. We're excited about the future and confident that our focused approach will deliver long term value to our shareholders. Thank you for your continued support. With that, I'd like to invite any questions. Speaker 200:08:57Operator? Operator00:08:59We will now begin the question and answer Our one question comes from Robert Bearman from Retail. Please go ahead. Speaker 400:09:41Thank you. I'm a longstanding shareholder and like management has suffered through a string of losses here. And I'd like to get some color on when you expect to become profitable. And if that is not achieved, what are your sources of liquidity and additional capital? Speaker 200:10:05I can lead that off. I appreciate the question. We do feel that with the pivot to the MGA model on the commercial line side and the support of the A rated paper, we do feel that the commission based model that we're moving to does allow us to achieve profitability more quickly than we had as a carrier based model. The personal lines obviously had a big impact on us in the Q2 with weather. We do feel good about the personal lines book that we have moving forward. Speaker 200:10:41Typically, the Q2 is a difficult quarter for us. So with the move to the revenue model based on commissions rather than balance sheet risk on the commercial line side, getting A rated paper on all of that business, allowing us to grow and improved weather results in the personal lines. We do think that that's a combination that will get us to profitability and that's what we're focused on. As it relates to liquidity, I'll let Harold tackle that one and talk a little bit about that. Speaker 300:11:14So we did have expense reductions over the last several years, which does help align our expense structure with our revenues. Also, we are we did mention in our 10 Q that to the extent that we need additional liquidity, we are considering other asset sales. Operator00:11:39With no further questions, this will conclude the question and answer session. Mr. Petcoff, you may conclude the call. Speaker 200:11:48Thank you. And we appreciate the question and we appreciate everyone's time and interest in the company and invite any of you to reach out to us at any time. And thank you and have a good day. Operator00:11:59The conference is 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 Q2 202400:00 / 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.deURGENT: This Altcoin Opportunity Won’t Wait – Act NowMy friends Joel and Adam have a simple motto: "For us, it's always a bull market." That’s because their 92% win rate trading system is built to profit in any market – whether Bitcoin is mooning, correcting, or chopping sideways. No more guessing. No more stress. Just precision trades that put you in control.May 7, 2025 | Crypto Swap Profits (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 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?Warning or Opportunity After Super Micro Computer's Earnings Upcoming Earnings Monster Beverage (5/8/2025)Coinbase Global (5/8/2025)Brookfield (5/8/2025)Anheuser-Busch InBev SA/NV (5/8/2025)ConocoPhillips (5/8/2025)Shopify (5/8/2025)Cheniere Energy (5/8/2025)McKesson (5/8/2025)Enbridge (5/9/2025)Petróleo Brasileiro S.A. - Petrobras (5/12/2025) 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. 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There are 5 speakers on the call. Operator00:00:00and welcome to Conifer Holdings Second Quarter 2024 Investor Conference 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 Roney. Operator00:00:24Please go ahead. Speaker 100:00:26Thank you, and good morning, everyone. Conifer issued its 2024 second quarter financial results after the close of market yesterday. You can find copies of the earnings release on the company's website at 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. Before 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. Speaker 100:01:16Actual results may differ materially from the results anticipated in these forward looking statements due to various risks and uncertainties underlying our 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 due to 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. Reconciliations 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. Speaker 100:02:11Statutory 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 Nick Preckhauf, our Chief Executive Officer. Nick? Speaker 200:02:29Thanks, Brian, and good morning, everyone. Also on the call with us today is Harold Meloche. As you review our Q2 results, you'll notice a significant change in our top line figures. This is a deliberate and strategic decision on our part as we continue our shift towards a commission based revenue model, channeling premium through our wholly owned managing general agency Conifer Insurance Services. Our focus is on ramping up the optimization of our commercial lines by running gross written premium through our MGA. Speaker 200:03:00This move aligns with our long term strategy to achieve more stable and predictable revenue streams through commissions rather than the traditional risk bearing carrier revenue model. While this has resulted in a lower top line compared to previous periods, it is a critical step in enhancing our overall profitability and creating a more scalable and sustainable business model. Under this model, we can leverage the expertise and network of our agency partners, enhancing our distribution channels and expanding our reach in key markets. Through this approach, our business is directly written by 3rd party insurers with AM Best ratings of A minus or better. Utilizing 3rd party A rated capacity providers for MGA produced business provides a much broader reach for existing profitable programs, enabling us to offer insured superior coverage in paper, while simultaneously governing risk through a scalable and sustainable production based revenue model. Speaker 200:03:55During the Q2 of 2024, we made significant strides in channeling premiums to our capacity providers across various commercial lines of business. Specifically, we have started to accelerate the transfer of cannabis premiums to our capacity partner Palomar, enabling us to expand into new markets and solidify our position as a leading provider of cannabis related coverage across the U. S. As planned, our commercial lines production decreased significantly in the Q2 compared to the prior year period. This is largely the result of more time required to ramp up our other complementary capacity providers in the period. Speaker 200:04:29For the quarter, our commercial lines combined ratio came in at 105% and the accident year combined ratio was a solid 81%. Overall, commercial lines represented roughly 36% of total production for the quarter. Switching to our Personal Alliance, these results were significantly impacted in the quarter by spring storms. Most of the loss came from our Oklahoma business, which is currently in runoff. We expect that the runoff process will be largely completed by year end. Speaker 200:04:59With Oklahoma going away, our production for this segment will primarily come from low valued homeowners business in Texas and the Midwest. In general, personalized production was retained through our traditional carrier based revenue model and represented a larger percentage of gross written premium in the 2nd quarter. We expect this trend to continue in the quarters ahead as we further transition our revenue model. Overall, we remain confident that this approach will yield market benefits over time, not only improving our margins, but also equipping us to better serve our insurance and agency partners with a more flexible and responsive offering. As we continue this transition, we remain committed to preserving a strong and consistent top line, continuing to streamline our expense structure and generating operational profitability over the long term to achieve favorable returns for our shareholders. Speaker 200:05:51With that, I'll turn the call over to Harold to discuss the numbers. Harold? Speaker 300:05:54Thank you, Nick. I'll provide a brief recap of the financial results and I encourage investors to review our filings and presentation on the company's website for further detail. In the Q2, overall gross written premium decreased 58% to $19,000,000 reflecting our decision to reduce premium leverage on our operating subsidiaries and to focus instead on the commission based revenue through our MGA Conifer Insurance Services. The breakout for 2nd quarter total gross written premium was 36% commercial lines and 64% personal lines. Overall, Conifer's combined ratio was 124% in the 2nd quarter, which was impacted by the Oklahoma storms. Speaker 300:06:41We stopped writing Oklahoma Premium in May, which should reduce which should result in improved mix of business of homeowners going forward. Our expense ratio continues to improve despite lower net earned premiums due to the success of our ongoing expense reduction efforts. The expense ratio was 32% in the 2nd quarter, down 580 basis points from the same period last year and well below our near term target of 35%. Agency commission in the 2nd quarter was nearly $9,000,000 compared to $211,000 in the Q2 of 2023, illustrating the progress the company has made in its initiative to drive commission based revenue and shift to a managing general agency business model. Net investment income was $1,500,000 during the 2nd quarter, up 11% from $1,400,000 in the prior year period. Speaker 300:07:42We recorded $196,000 decrease in the fair value of equity investments in the 2nd quarter, leading to a net realized investment loss of $118,000 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 on average duration of 2.6 years and a tax equivalent yield of 3.4%. Our company reported net loss allocable to common shareholders of $4,000,000 or $0.32 per share and adjusted operating loss of $3,600,000 or $0.30 per share for the Q2 of 2024. Moving to the balance sheet, total assets were $293,000,000 at quarter end with cash and total investments of 154,000,000 dollars And with that, I'd like to turn it back over to Nick for closing remarks. Speaker 200:08:40Thanks, Harold. In summary, as we wrap up, this strategic shift is positioning us for stronger, more sustainable growth. We're excited about the future and confident that our focused approach will deliver long term value to our shareholders. Thank you for your continued support. With that, I'd like to invite any questions. Speaker 200:08:57Operator? Operator00:08:59We will now begin the question and answer Our one question comes from Robert Bearman from Retail. Please go ahead. Speaker 400:09:41Thank you. I'm a longstanding shareholder and like management has suffered through a string of losses here. And I'd like to get some color on when you expect to become profitable. And if that is not achieved, what are your sources of liquidity and additional capital? Speaker 200:10:05I can lead that off. I appreciate the question. We do feel that with the pivot to the MGA model on the commercial line side and the support of the A rated paper, we do feel that the commission based model that we're moving to does allow us to achieve profitability more quickly than we had as a carrier based model. The personal lines obviously had a big impact on us in the Q2 with weather. We do feel good about the personal lines book that we have moving forward. Speaker 200:10:41Typically, the Q2 is a difficult quarter for us. So with the move to the revenue model based on commissions rather than balance sheet risk on the commercial line side, getting A rated paper on all of that business, allowing us to grow and improved weather results in the personal lines. We do think that that's a combination that will get us to profitability and that's what we're focused on. As it relates to liquidity, I'll let Harold tackle that one and talk a little bit about that. Speaker 300:11:14So we did have expense reductions over the last several years, which does help align our expense structure with our revenues. Also, we are we did mention in our 10 Q that to the extent that we need additional liquidity, we are considering other asset sales. Operator00:11:39With no further questions, this will conclude the question and answer session. Mr. Petcoff, you may conclude the call. Speaker 200:11:48Thank you. And we appreciate the question and we appreciate everyone's time and interest in the company and invite any of you to reach out to us at any time. And thank you and have a good day. Operator00:11:59The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.Read morePowered by