Release Date: July 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Delivered a solid 30.5% annualized adjusted return on common equity.
- Achieved 35.6% adjusted diluted earnings per share growth year over year.
- Florida policies in force increased sequentially for the second quarter in a row.
- Completed the placement of the 2024/2025 reinsurance renewal with modest cost increase.
- Repurchased approximately 274,000 shares at an aggregate cost of $5.3 million.
Negative Points
- Lower commission revenue partially offset core revenue growth.
- Direct premiums written growth in Florida was only 0.9%, indicating slower growth in the key market.
- Net expense ratio remained unchanged at 25.3%, showing no improvement in expense management.
- Concerns about potential competition and rate declines due to tort reform in Florida.
- Weather-related losses, although contained, remain a consistent risk factor.
Q & A Highlights
Q: Any updated thoughts on the impact of tort reform in Florida?
A: Stephen Donaghy, CEO: We continue to see positive impacts from the December '22 legislation, particularly in terms of represented and litigation affecting our book. This has led us to be optimistic about our share repurchases and our current position.
Q: Were there any movements in reserves development this quarter?
A: Frank Wilcox, CFO: No, we had zero net development on reserves this quarter.
Q: How did catastrophe losses and weather impact the quarter?
A: Frank Wilcox, CFO: While we experience weather impacts every quarter, this quarter's weather was well-contained within our loss pick.
Q: Is there any industry pushback or regulatory pressure for rate declines due to tort reform?
A: Stephen Donaghy, CEO: We are not experiencing any pressure regarding rates. We are currently analyzing our rates with actuaries to understand the impact on 2024. We expect a reduction due to tort reform but will balance this with market conditions. We remain focused on rate adequacy and have confidence in our market position.
Q: Any thoughts on competition and market positioning post-tort reform?
A: Stephen Donaghy, CEO: We are optimistic about the market's success and are not overly concerned about competition. Our focus remains on rate adequacy and maintaining strong relationships with our agency force, which gives us confidence in our future positioning.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
