Conifer Holdings, Inc.

Good morning and welcome to Conifer Holdings Q4 2020 Investors Conference Call. All participants will be in 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'll be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Adam Pryor from The Equity Group. Please go ahead.

Thank you, Kate, and good morning, everyone. Conifer issued its 2020 fourth quarter and year-end 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's discussion today, which is available to view or download via webcast or from the industrial relations 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 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 other laws. 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 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&A session after management's prepared remarks this morning. And with that, I'll turn the call over to Mr. Jim Petcock, Chairman and Chief Executive Officer. Please go ahead, Jim.

Thank you, Adam, and good morning. On the call with me today are Nick, Harold, Andy, and Brian. I'll provide a brief overview. Nick will discuss our underwriting results in greater detail, and then Harold will cover the financials. Looking back at 2020, it's really hard to conceive of all that's transpired in a year dominated by the global pandemic. Hopefully, we are approaching a return to normalcy in the days ahead. In 2020, Conifer adapted thanks to the resilience, hard work, and collective spirit of our employees. many thanks to all of you who truly embody the commitment and drive necessary to successfully tackle such adversity. After several years of fine-tuning our business mix, we are very pleased with our current portfolio. I'm pleased to see our top line close 2020 with gross rate and premium up over 9% for the full year. Considering the challenges faced, that was a very solid result. More notable, though, is the sequential growth rate experienced throughout the course of the year. It grew in the first and second quarters, but at a smaller rate due to the shelter-in-place restrictions imposed in response to the pandemic. As the states began to open back up, our growth accelerated in the third and fourth quarters. We ended the year with gross written premiums increasing by almost 14% in the fourth quarter versus fourth quarter 2019, with just under $29 million in written premiums in Q4. We think this sets us up to hit the ground running in 2021. On a GAAP basis, 2020 was also a profitable year for the company. As with our top line, the fourth quarter was our most profitable of the year. We reported profitable operations during the quarter largely due to increased premium volumes overall and higher realized gains from investments, leading the company to post earnings per share on a GAAP basis of 34 cents during the quarter. We also generated an increase in our book value ending the year at $4.59 per share. Looking ahead to 2021, our focus will continue to be on growing our top line, both through targeted rate increases and select new policy additions in our core specialty markets. Accounted for 2020 was also a year of significantly reduced claims activity, both in frequency and severity, as businesses were closed and people generally spent more time at home. We do expect some reversal of that trend in 2021. However, with various levels of shutdown still in place in some states across the country, we expect the first half of this year to follow the last in terms of claims activity. In addition to growing our top line in 2021 and beyond, we remain diligently focused on reducing our operating expenses as well. We have a near-term goal of driving our expense rate of 40% or below, which we expect will yield a consistent underwriting profit over time. We continue to closely monitor our performance across our book in all our specialty niche markets. Our core markets performed quite well in 2020, including hospitality. While restaurants and bars have been heavily impacted throughout the pandemic, we hope and expect their operations will return to normal soon. We also intend to maintain the momentum we are enjoying in other markets, specifically small commercial business and in our low-value dwelling operations. We look forward to profitable growth for all of 2021. With that, let me turn it over to Nick for some color in our underwriting. Nick.