Conifer Holdings Reports 2024 Fourth Quarter and Year End Financial Results
TROY, Mich., March 28, 2025 (GLOBE NEWSWIRE) -- Conifer Holdings, Inc. (Nasdaq: CNFR) ("Conifer" or the "Company") today announced results for the fourth quarter and year ended December 31, 2024.
Year End 2024 Financial Highlights
-- Net income allocable to common shareholders of $23.5 million
-- $61 Million gain on sale of insurance agency operations in August 2024
-- Continuing Personal Lines business profitable for the fourth quarter of
2024
-- Book value per share of $1.76 as of December 31, 2024
Management Comments
Brian Roney, CEO of Conifer, commented, "2024 was indeed a transitional year for Conifer Holdings as we successfully sold our insurance agency operations, paid down considerable debt, further strengthened reserves, streamlined our organization overall, and focused our production efforts on select personal lines going forward."
Reduction of Commercial Lines Business
For the full year 2024, total Gross Written Premium was down almost 50% from the prior year, and Net Earned premium was down 27.5% for the same period. As a result of the sale of Conifer's insurance agency operations, completed in August 2024, we anticipated and planned for this significant decline in Commercial Lines revenue. We expect Commercial Lines business to represent a diminishing percentage of total gross written premium going forward.
Future premiums are expected to consist primarily of Personal Lines business, notably our homeowner's insurance portfolio in Texas and the Midwest. As detailed in the Personal Lines results overview below, gross written premium for those lines of business for the fourth quarter of 2024 increased 10.6% from the prior year period and increased 23.4% for the full year 2024 over the prior year.
Additional information regarding the disposal of Conifer's agency business and its impact on future Company operations can be found in the Company's 2024 Annual Report to be filed March 28, 2025 on Form 10-K.
2024 Fourth Quarter and Full Year Financial Results Overview
At and for the At and for the
Three Months Ended December 31, Year Ended December 31,
2024 2023 % Change 2024 2023 % Change
--------------- --------------- ---------- --------------- --------------- ----------
(dollars in thousands, except share and per share
amounts)
Gross written
premiums $ 13,683 $ 24,398 -43.9% $ 72,053 $ 143,834 -49.9%
Net written
premiums 9,526 15,329 -37.9% 49,338 68,688 -28.2%
Net earned
premiums 12,708 14,821 -14.3% 60,862 83,935 -27.5%
Net investment
income 1,352 1,411 -4.2% 5,763 5,447 5.8%
Net realized
investment gains
(losses) - (20) ** (125) (20) **
Change in fair
value of equity
investments (21) 13 261.5% (203) 608 -133.4%
Net income (loss)
allocable to
common
shareholders (25,382) (19,479) -30.3% 23,530 (25,923) **
Net income
(loss)
allocable to
common
shareholders $ (2.08) $ (1.59) -30.3% $ 1.93 $ (2.12)
per share,
diluted
Adjusted
operating income
(loss)* (25,821) (19,411) -33.0% (34,558) (27,867) -24.0%
Adjusted
operating
income
(loss) per
share,
diluted* $ (2.11) $ (1.59) -32.7% $ (2.83) $ (2.28) -24.1%
Book value per
common share
outstanding $ 1.76 $ 0.24 $ 1.76 $ 0.24
Weighted average
shares
outstanding,
basic and
diluted 12,222,881 12,222,881 12,222,881 12,220,551
Underwriting
ratios:
Loss ratio
(1) 254.6% 191.1% 120.2% 97.8%
Expense ratio
(2) 38.3% 40.6% 35.8% 37.1%
---------- ---------- ---------- ----------
Combined
ratio (3) 292.9% 231.7% 156.0% 134.9%
========== ========== ========== ==========
* The "Definitions of Non-GAAP Measures" section of
this release defines and reconciles data that are
not based on generally accepted accounting principles.
** Percentage is
not meaningful
(1) The loss ratio is the ratio, expressed as a percentage,
of net losses and loss adjustment expenses to net
earned premiums and other income from underwriting
operations.
(2) The expense ratio is the ratio, expressed as a
percentage, of policy acquisition costs and other
underwriting expenses to net earned premiums and other
income from underwriting operations.
(3) The combined ratio is the sum of the loss ratio
and the expense ratio. A combined ratio under 100%
indicates an underwriting profit. A combined ratio
over 100% indicates an underwriting loss.
2024 Fourth Quarter Gross Written Premium
Gross written premiums decreased 43.9% in the fourth quarter of 2024 to $13.7 million, compared to $24.4 million in the prior year period. This decrease reflects the Company's operational shift away from commercial lines insurance business given the sale of our agency group earlier in the year.
Commercial Lines Financial and Operational Review
Three Months Ended December 31, Year Ended December 31,
2024 2023 % Change 2024 2023 % Change
----------- ----------- ---------- ----------- ------------ ----------
(dollars in thousands)
Gross written
premiums $3,124 $14,850 -79.0% $26,686 $107,078 -75.1%
Net written
premiums 488 7,009 93.0% 14,541 36,580 -60.2%
Net earned
premiums 4,254 7,296 -41.7% 28,160 59,221 -52.4%
Underwriting
ratios:
Loss ratio 650.8% 316.7% 184.8% 105.7%
Expense
ratio 33.8% 38.4% 29.8% 35.5%
----- ------ ------ -------
Combined
ratio 684.6% 355.1% 214.6% 141.2%
===== ====== ====== =======
Contribution to
combined ratio
from net
(favorable)
adverse
prior year
development 550.9% 205.5% 118.5% 32.3%
----- ------ ------ -------
Accident year
combined ratio
(1) 133.7% 149.6% 96.1% 108.9%
===== ====== ====== =======
(1) The accident year combined ratio is the sum of
the loss ratio and the expense ratio, less changes
in net ultimate loss estimates from prior accident
year loss reserves. The accident year combined ratio
provides management with an assessment of the specific
policy year's profitability and assists management
in their evaluation of product pricing levels and
quality of business written.
The Company's commercial lines production was down 79% for the fourth quarter of 2024 and represented roughly 23% of total gross written premium in quarter. Commercial Lines net earned premium was down 41.7% for the same period. The Commercial Lines loss ratio for the quarter increased significantly as the Company's management focused on additional commercial lines reserve strengthening overall.
Personal Lines Financial and Operational Review
Three Months Ended December 31, Year Ended December 31,
2024 2023 % Change 2024 2023 % Change
----------- ---------- ---------- ----------- ----------- ----------
(dollars in thousands)
Gross written
premiums $10,559 $9,548 10.6% $45,367 $36,756 23.4%
Net written
premiums 9,038 8,320 8.6% 34,797 32,108 8.4%
Net earned
premiums 8,454 7,525 12.3% 32,702 24,714 32.3%
Underwriting
ratios:
Loss ratio 55.2% 69.0% 64.6% 78.9%
Expense
ratio 40.6% 42.7% 41.1% 40.7%
------ ----- ------ ------
Combined
ratio 95.8% 111.7% 105.7% 119.6%
====== ===== ====== ======
Contribution to
combined ratio
from net
(favorable)
adverse
prior year
development 0.9% -2.6% 0.8% -5.6%
------ ----- ------ ------
Accident year
combined
ratio 94.9% 114.3% 104.9% 125.2%
------ ----- ------ ------
Personal Lines premium represented 77% of total gross written premium for the fourth quarter of 2024. Personal Lines production increased 10.6% from the prior year period to $10.6 million for the quarter, led by growth in the Company's low-value dwelling line of business in Texas and the Midwest.
Despite storm activity in the full year, the combined ratio for personal lines business improved significantly in 2024 compared to the same period in 2023.
Combined Ratio Analysis
Three Months Ended Year Ended
December 31, December 31,
2024 2023 2024 2023
------------ ---------- --------- ---------
Underwriting ratios:
Loss ratio 254.6% 191.1% 120.2% 97.8%
Expense ratio 38.3% 40.6% 35.8% 37.1%
------- ------ ----- -----
Combined ratio 292.9% 231.7% 156.0% 134.9%
======= ====== ===== =====
Contribution to
combined ratio from
net (favorable)
adverse prior
year
development 185.0% 100.0% 55.3% 21.2%
------- ------ ----- -----
Accident year
combined ratio 107.9% 131.7% 100.7% 113.7%
------- ------ ----- -----
Net Investment Income
Net investment income increased 5.8% to $5.8 million for the year ending December 31, 2024, compared to $5.4 million in the prior year period.
Change in Fair Value of Equity Securities
During the quarter, the Company reported a loss of $21,000 from the change in fair value of equity investments, compared to a $13,000 gain in the prior year period.
Net Income (Loss) allocable to common shareholders
The Company reported a net loss allocable to common shareholders of $25.4 million, or $2.08 per share, for the fourth quarter of 2024. For the full year 2024, the Company reported net income allocable to common shareholders of $23.5 million, or $1.93 per share.
Adjusted Operating Income (Loss)
In the fourth quarter of 2024, the Company reported an adjusted operating loss of $25.8 million, or $2.11 per share. See Definitions of Non-GAAP Measures.
About Conifer Holdings
Conifer Holdings, Inc. is a Michigan-based property and casualty holding company. Through its subsidiaries, Conifer offers specialty insurance coverage for both commercial and personal lines, marketing through independent agents. The Company is traded on the Nasdaq Capital Market under the symbol CNFR. Additional information is available on the Company's website at www.ir.cnfrh.com.
Forward-Looking Statement
This press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give current expectations or forecasts of future events or our future financial or operating performance, and include Conifer's expectations regarding future revenue, premiums, earnings, its capital position, expansion, and business strategies. The forward-looking statements contained in this press release are based on management's good-faith belief and reasonable judgment based on current information. The forward-looking statements are qualified by important factors, risks and uncertainties, many of which are beyond our control, that could cause our actual results to differ materially from those in the forward-looking statements, including those described in our Form 10-K ("Item 1A Risk Factors") filed with the SEC on March 28, 2025 and subsequent reports filed with or furnished to the SEC. Any forward-looking statement made by us in this press release speaks only as of the date hereof or as of the date specified herein. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable laws or regulations.
Definitions of Non-GAAP Measures
Conifer prepares its public financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP). Statutory data is prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners' (NAIC) Accounting Practices and Procedures Manual, and therefore is not reconciled to GAAP data.
We believe that investors' understanding of Conifer's performance is enhanced by our disclosure of adjusted operating income. Our method for calculating this measure may differ from that used by other companies and therefore comparability may be limited. We define adjusted operating income (loss), a non-GAAP measure, as net income (loss) excluding: 1) net realized investment gains and losses, 2) change in fair value of equity securities 3) other gains and 4) net income from discontinued operations. We use adjusted operating income as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance.
Reconciliations of adjusted operating income (loss) and adjusted operating income (loss) per share:
Three Months Ended December
31, Year Ended December 31,
----------------------------- --------------------------
2024 2023 2024 2023
--------------- ------------ ------------ ------------
(dollar in thousands, except share and per share amounts)
Net income (loss) $ (25,382) $ (19,460) $ 24,347 $ (25,904)
Less:
Net realized
investment
gains
(losses) - (20) (125) (20)
Change in fair
value of
equity
securities (21) 13 (203) 608
Other gains 646 - 646 -
Net income
from
discontinued
operations (186) (42) 58,587 1,375
Impact of
income tax
expense
(benefit) from
adjustments * - - - -
Adjusted
operating income
(loss) $ (25,821) $ (19,411) $ (34,558) $ (27,867)
========== ========== ========== ==========
Weighted average
common shares,
diluted 12,222,881 12,222,881 12,222,881 12,220,551
Diluted income
(loss) per common
share:
Net income (loss) $ (2.08) $ (1.59) $ 1.99 $ (2.12)
Less:
Net realized
investment
gains
(losses) - - (0.01) -
Change in fair
value of
equity
securities - - (0.02) 0.05
Other gains 0.05 - 0.06 -
Net income
from
discontinued
operations (0.02) - 4.79 0.11
Impact of
income tax
expense
(benefit) from
adjustments * - - - -
Adjusted
operating income
(loss), per
share $ (2.11) $ (1.59) $ (2.83) $ (2.28)
========== ========== ========== ==========
* The Company has recorded a full valuation allowance against its deferred tax assets as of December 31, 2024 and December 31, 2023, respectively. As a result, there were no taxable impacts to adjusted operating income from the adjustments to net income (loss) in the table above after taking into account the use of NOLs and the change in the valuation allowance.
Conifer Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets
(dollars in thousands)
December 31 December 31,
2024 2023
------------- --------------
Assets
Investment securities:
Debt securities, at fair value
(amortized cost of $117,827 and $ 105,665 $ 122,113
$135,370, respectively)
Equity securities, at fair value
(cost of $1,836 and $2,385,
respectively) 1,603 2,354
Short-term investments, at fair
value 21,151 20,838
-------- ---------
Total investments 128,419 145,305
Cash and cash equivalents 27,654 10,663
Premiums and agents' balances
receivable, net 9,901 29,364
Receivable from Affiliate - 1,047
Reinsurance recoverables on unpaid
losses 84,490 70,807
Reinsurance recoverables on paid losses 6,919 12,619
Prepaid reinsurance premiums 6,088 28,908
Deferred policy acquisition costs 6,380 6,405
Receivable from contingent
considerations 8,070 -
Other assets 3,735 7,036
Assets from discontinued operations - 3,452
-------- ---------
Total assets $ 281,656 $ 315,606
======== =========
Liabilities and Shareholders' Equity
Liabilities:
Unpaid losses and loss adjustment
expenses $ 189,285 $ 174,612
Unearned premiums 30,590 65,150
Reinsurance premiums payable 1 246
Debt 11,932 25,061
Funds held under reinsurance
agreements 25,829 24,550
Premiums payable to other insureds - 13,986
Liabilities from discontinued
operations - 4,083
Accounts payable and accrued
expenses 2,494 5,029
Total liabilities 260,131 312,717
Commitments and contingencies - -
Shareholders' equity:
Series A Preferred stock, no par value (10,000,000
shares authorized; 0 and 1,000
issued and outstanding,
respectively) - 6,000
Common stock, no par value
(100,000,000 shares authorized;
12,222,881
issued and outstanding,
respectively) 98,178 98,100
Accumulated deficit (63,153) (86,683)
Accumulated other comprehensive
income (loss) (13,500) (14,528)
Total shareholders' equity 21,525 2,889
-------- ---------
Total liabilities and
shareholders' equity $ 281,656 $ 315,606
======== =========
Conifer Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
(dollars in thousands, except share and per share
data)
Three Months Ended Year Ended
December 31, December 31,
-------------------------- --------------------------
2024 2023 2024 2023
------------ ------------ ------------ ------------
Revenue and
Other Income
Premiums
Gross
earned
premiums $ 19,721 $ 38,115 $ 106,612 $ 146,572
Ceded
earned
premiums (7,013) (23,294) (45,750) (62,637)
---------- ---------- ---------- ----------
Net
earned
premiums 12,708 14,821 60,862 83,935
Net
investment
income 1,352 1,411 5,763 5,447
Net realized
investment
gains
(losses) - (20) (125) (20)
Change in
fair value
of equity
securities (21) 13 (203) 608
Other gains 646 - 646 -
Other income 41 144 328 552
Total
revenue
and
other
income 14,726 16,369 67,271 90,522
Expenses
Losses and
loss
adjustment
expenses,
net 32,349 28,470 73,302 82,413
Policy
acquisition
costs 3,535 2,392 13,335 15,797
Operating
expenses 3,165 3,969 11,831 16,738
Interest
expense 862 845 4,883 3,206
Total
expenses 39,911 35,676 103,351 118,154
---------- ---------- ---------- ----------
Income (loss)
from
continuing
operations
before income
taxes (25,185) (19,307) (36,080) (27,632)
Income tax
expense
(benefit) 11 111 (1,840) (353)
---------- ---------- ---------- ----------
Net income
(loss) from
continuing
operations $ (25,196) $ (19,418) $ (34,240) $ (27,279)
Net income
(loss) from
discontinued
operations (186) (42) 58,587 1,375
---------- ---------- ---------- ----------
Net income
(loss) (25,382) (19,460) 24,347 (25,904)
Series A
Preferred
Stock
Dividends and
Redemption
premium - 19 817 19
Net income
(loss)
allocable to
common
shareholders (25,382) (19,479) 23,530 (25,923)
========== ========== ========== ==========
Earnings (loss)
per common
share, basic
and diluted
Net income
(loss) from
continuing
operations $ (2.06) $ (1.59) $ (2.87) $ (2.23)
Net income
(loss) from
discontinued
operations $ (0.02) $ (0.00) $ 4.79 $ 0.11
Net income
(loss)
allocable to
common
shareholders $ (2.08) $ (1.59) $ 1.93 $ (2.12)
Weighted
average common
shares
outstanding,
basic and
diluted 12,222,881 12,222,881 12,222,881 12,220,551
For Further Information:
Jessica Gulis, 248.559.0840
ir@cnfrh.com
(END) Dow Jones Newswires
March 28, 2025 16:01 ET (20:01 GMT)
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