Conifer Holdings, Inc.

Good morning and welcome to Conifer Holdings' second quarter 2024 investor 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 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. Please go ahead.

Thank 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. 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 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. 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 Prekoff, our Chief Executive Officer.

Nick? Thanks, Brian, and good morning, everyone. Also on the call with us today is Harold Milosz. As you review our second quarter 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. This 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 third-party insurers with AM Best ratings of A- or better. Utilizing third-party A-rated capacity providers for our MGA-produced business provides a much broader reach for existing profitable programs, enabling us to offer insureds superior coverage and paper while simultaneously governing risk through a scalable and sustainable production-based revenue model. During the second quarter 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 second quarter 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. For 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 lines, 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. With 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 second 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 insurers 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. With that, I'll turn the call over to Harold to discuss the numbers.