Conifer Holdings, Inc.

Good morning and welcome to Conifer Holdings' third quarter investor conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask a question. Please note that this event is being recorded. I'd like to turn the conference over to Mr. Adam Pryor. Please go ahead.

Thank you, and good morning, everyone. Conifer issued its 2020 third quarter financial results after the close of market yesterday. On the company's website, ir.cnfrh.com, you can find copies of the earnings release as well as the slide presentation that accompanies management discussion today, which is available to view or download via webcast or from the investor relation portion of Conifer's website. Before we get started, The company has asked that I note that except with respect 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 from CONIFER may differ materially from the results anticipated in these forward-looking statements as a result of various risks and uncertainties. underlying our forward-looking statements, including risks and uncertainties associated with COVID-19 and its impact on the economy and on our business, as well as those risks described from time to time in Conifer's filings with the SEC, including our latest Form 10-K 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. Reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures are included when possible in our earnings release and historical SEC filings. Statutory accounting data is prepared in accordance with statutory accounting rules and therefore not reconcile the GAAP. We will conduct a Q&A session after management's prepared remarks this morning. With that, I'll turn the call over to Mr. Jim Petkoff, Chairman and Chief Executive Officer. Please go ahead, Jim.

Thanks, Adam. Good morning, everyone. On the call with me today is Nick, Harold, Andy, and Brian. I'm going to provide a brief overview. Nick will discuss our underwriting results in greater detail, and then Harold will cover the financials. Beginning with our top line, we reported solid growth in our core lines. Gross written premiums increased over 10% in the quarter to just under $30 million. We reported profitable operations during the quarter, largely due to higher realized gains from investments, leading the company to post earnings per share on a gap basis of six cents during the quarter. We feel very good about our current business mix, with the emphasis on select commercial accounts, all performing largely as we expected. This, along with our personal lines, low-value and dwelling business, which has contributed meaningfully to the bottom line all year long, Given the heavy CAD impact of our peers and most in the industry as well, we are especially pleased to post these personal lines results in light of the highly unusual CAD activity. However, we have continued to see increased claims activity from select older years, 2018 and prior in our hospitality business, largely focused in the quick service restaurant area that required additional reserve strengthening. These reserves moves muted and otherwise solid quarter for the company in a positively developing rate environment overall. As a reminder, Conifer has been transitioning our book of business away from personalized coastal wind exposure and toward our specialty core commercial business. This plan move away from the cat exposed areas into markets where we have a distinct value proposition over our competitors was a way of de-risking our portfolio from a volatility perspective and achieve sustainable profitability in markets where we can be a leader over time. We believe the transition away from CatExpose Premium is largely complete, as our business split is 90% specialty commercial and 10% personal lines, with the latter largely coming from our low-value dwelling products. During our transition, we reiterated our belief in a balanced book covering both commercial and personal and long-tail versus short-tail business. Moreover, within our underwriting, we value the ability to evaluate and place risks as either admitted business or in the access and surplus lines company. That ability to pivot between commercial and personal, long-tail and short, admitted, and ENS is an advantage we have over our peers. And we believe this will generate greater underwriting selection overall and improve the profitability over time. This balance served the company very well during the third quarter as our specific market niche in low value dwelling products generated exceptional results, both in terms of 24% top line growth in gross written premiums and even more impressively generating a 68% personal lines combined ratio. Geographically, moving into personal lines markets we know well, while avoiding the coastal exposure has helped us to outperform our peers. In addition, we are seeing lower instances of overall claim activity, which we attribute to an increased propensity for individuals and families to be at home during the current pandemic conditions. In commercial lines, one of our distinguishing factors is that we cultivate relationships with agents and insureds that specialize in our area of expertise, and they meet our selective underwriting criteria. This strategy is starting to produce the results we have anticipated as our commercial lines premiums grew by over 9% in the quarter. This growth is even better when compared to the reduced hospitality premiums during the period. We are pleased to be maintaining high overall premium retention levels as well, and we continue to see favorable rate dynamics in our commercial lines in general as we move into 2021. Over the last two quarters, we spoke extensively about COVID-19 and its impact on our markets, employees, and the economy in general. We have taken a cautious and deliberate approach to the impact of the virus. Our principal focus is on the safety of our employees as we continue to provide exceptional service to our agents and their insurance. Overall, we continue to closely monitor performance across our book and the segments we focus, specifically in hospitality markets. As discussed in previous calls, the majority of our writings in this regard, premium-wise, have not been impacted as greatly as we prepared for earlier in the year. And as positive in this difficult time, overall claims volumes continue to be down significantly, specifically in our liability lines versus earlier in the year and versus last year as well. We have shifted the majority of our premiums into our more commercial lines with favorable effects and loss ratios and are continuing to improve. We also believe that our expense ratio will start to tick down as growth filters through our book of business and we continue to optimize costs. With that, let me turn it over to Nick for some more color on our specific lines of business.