Conifer Holdings, Inc.

Good day and welcome to the Conifer Holdings Fourth Quarter 2023 Earnings 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 questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Brian Roney. Please go ahead.

Thank you and good morning, everyone. Conifer issued a press release relating to its 2023 fourth quarter 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. 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. Actual 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-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. 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. 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. With that, I'll turn the call over to Nick Petkoff, our Chief Executive Officer.

Nick? Thanks, Brian, and good morning, everyone. Also on the call with us today is our CFO, Harold Milosz. As we close the chapter on 2023, I want to take a moment to provide some insight into the numbers we've reported for the full year. The absolute majority of our total reported loss was actually realized in the fourth quarter alone and was the result of a strategic decision on our part. In the fourth quarter, we made the conscious decision to further strengthen our overall reserves by fully booking to our outside actuary's point estimate. Given the magnitude of the financial impact, this decision was not taken lightly. but we do believe it was prudent to ensure the long-term stability of our company and to protect against further development in the future. Another factor affecting financial performance during the year was the impact of convective storms on our personal lines book of business in Oklahoma in particular. Our Texas personal lines book also saw storms in the year, but generally performed much better overall. As a result, even after several solidly performing years prior, we made the decision to reduce the overall storm risk and non-renew our Oklahoma book, which is now in runoff. As for personal lines going forward, we do expect to continue underwriting the low-valued homeowners business written in Texas and in the Midwest. These regions have proven to be reliable sources of revenue for our company, and we recognize the importance of maintaining our presence in these markets. We remain committed to serving the needs of homeowners in these regions by providing them with reliable and affordable insurance coverage. We believe that by continuing to underwrite profitable business in Texas and the Midwest, we can remain well positioned for long-term success. For the full year 2023, our personal lines production was roughly 26% of total premiums written, with the remaining 74% of premium coming from commercial lines. As for commercial lines, we have made a significant strategic shift in revenue recognition models in 2023 and beyond. Whereby, in years past, we had employed a risk retention model utilizing our operating insurance companies to write and retain underwriting risk for commercial lines premium, we have moved to a production-based revenue model through our wholly owned managing general agency, Conifer Insurance Services, or CIS. With that in mind, for Commercial Lines production, we have decided to transition away from the limitations of a carrier-based revenue model and instead embrace a managing general agency production-based revenue approach. This shift represents a fundamental change in how we do business, and it is one that we believe will position us for long-term success and sustainability. Under this new model, starting in the second quarter of 2024, substantially all of our Commercial Lines business will be directly written by third-party insurers with AMVS ratings of A-minus or better. Utilizing third-party A-rated capacity providers for our MGA-produced business will provide a much broader reach for existing profitable programs. Further, it will empower us to ensure a sustainable business model going forward, one that is more focused on commission revenue and less on risk retention through our subsidiary carriers. When looking to the future and across the insurance landscape, it has become increasingly clear that we need to adapt to a production-based world in order to thrive in a rapidly changing market. With that in mind, as outlined in several press releases earlier this week, we are pleased to partner with both Palomar and Accelerant to provide A-rated paper to our commercial lines insureds going forward. Both of those partners will allow us to better meet our customers' overall needs and extend our reach in the profitable markets that we serve best. I want to assure our shareholders, policyholders, and partners that this transition has been managed thoughtfully and responsibly. We are working closely with all stakeholders to ensure a smooth and seamless transition, minimizing any disruptions to our operations, and maintaining the high standards of service and integrity that remain our company's hallmark. Thank you for your continued support as we embark on this exciting new chapter in Conifer's journey. Our commitment to excellence, integrity, and transparency continues to drive every decision we make. And with that, I'll pass the call over to Harold to discuss the numbers. Harold?