10/29/2024 | Press release | Distributed by Public on 10/29/2024 14:08
(1) See "Reconciliation of Non-GAAP Financial Measures"
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Premiums | |||||||||||
($ in thousands) | Three months ended September 30, | Nine months ended September 30, | |||||||||
unaudited | 2024 | 2023 |
% Change |
2024 | 2023 |
% Change |
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Gross written premiums | $ | 400,014 | $ | 355,732 | 12.4% | $ | 1,354,877 | $ | 1,138,224 | 19.0% | |
Ceded written premiums | $ | (131,692) | $ | (75,036) | 75.5% | $ | (502,326) | $ | (441,650) | 13.7% | |
Net retention | 67.1% | 78.9% |
NM (1)
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62.9% | 61.2% |
NM (1)
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Net written premiums | $ | 268,322 | $ | 280,696 | (4.4) | % | $ | 852,551 | $ | 696,574 | 22.4% |
Net earned premiums | $ | 269,557 | $ | 227,033 | 18.7 | % | $ | 763,482 | $ | 604,211 | 26.4% |
(1) Not meaningful
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Combined Ratio | Three months ended September 30, | Nine months ended September 30, | ||||||
(unaudited) | 2024 | 2023 | 2024 | 2023 | ||||
Non-cat loss and LAE(1)
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60.6 | % | 60.7 | % | 60.6 | % | 60.9 | % |
Cat loss and LAE(1)
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2.8% | 0.4 | % | 1.5 | % | 1.8 | % | |
Prior accident year development - LPT(2)
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(0.1) | % | (0.1)% | (0.1) | % | (0.2)% | ||
Loss Ratio | 63.3 | % | 61.0 | % | 62.0 | % | 62.5 | % |
Net policy acquisition costs | 13.9 | % | 15.0 | % | 13.9 | % | 13.0 | % |
Other operating and general expenses | 15.7 | % | 15.1 | % | 15.8 | % | 16.3 | % |
Commission and fee income | (0.7) | % | (0.9) | % | (0.8) | % | (1.0) | % |
Expense ratio | 28.9 | % | 29.2 | % | 28.9 | % | 28.3 | % |
Combined ratio | 92.2 | % | 90.2 | % | 90.9 | % | 90.8 | % |
Ex-Cat Combined Ratio(3)
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89.4 | % | 89.8 | % | 89.4 | % | 89.0 | % |
Adjusted Underwriting Ratios | ||||||||
Adjusted loss ratio(2)
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63.4 | % | 61.1 | % | 62.1 | % | 62.7 | % |
Expense ratio | 28.9 | % | 29.2 | % | 28.9 | % | 28.3 | % |
Adjusted combined ratio(2)
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92.3 | % | 90.3 | % | 91.0 | % | 91.0 | % |
(1) Current accident year
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(2) See "Reconciliation of Non-GAAP Financial Measures"
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(3) Defined as the combined ratio excluding cat loss and LAE(1)
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Net Investment Income | |||||||||
$ in thousands | Three months ended September 30, | Nine months ended September 30, | |||||||
(unaudited) | 2024 | 2023 | 2024 | 2023 | |||||
Short-term investments & cash and cash equivalents | $ | 4,537 | $ | 3,022 | $ | 13,645 | $ | 8,007 | |
Fixed income
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15,458 | 9,488 | 41,722 | 24,867 | |||||
Equities
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596 | 650 | 1,974 | 1,332 | |||||
Alternative & strategic investments
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(1,070) | (71) | 2,615 | (7,888) | |||||
Net investment income
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$ | 19,521 | $ | 13,089 | $ | 59,956 | $ | 26,318 | |
Net unrealized gains (losses) on securities still held
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$ | 8,378 | $ | (6,391) | $ | 15,609 | $ | 2,394 | |
Net realized gains
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1,809 | 3,407 | 1,056 | 934 | |||||
Net investment gains (losses) | $ | 10,187 | $ | (2,984) | $ | 16,665 | $ | 3,328 | |
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Consolidated Balance Sheets | ||||
($ in thousands, except share and per share amounts) | ||||
(unaudited) |
September 30, 2024 |
December 31, 2023 | ||
Assets | ||||
Investments: | ||||
Fixed maturity securities, available-for-sale, at fair value (amortized cost of $1,359,700 and $1,047,713, respectively) | $ | 1,357,500 | $ | 1,017,651 |
Fixed maturity securities, held-to-maturity, at amortized cost (net of allowance for credit losses of $239 and $329, respectively) | 39,321 | 42,986 | ||
Equity securities, at fair value | 124,719 | 118,249 | ||
Mortgage loans, at fair value | 36,267 | 50,070 | ||
Equity method investments | 102,111 | 110,653 | ||
Other long-term investments | 23,802 | 3,852 | ||
Short-term investments, at fair value | 206,358 | 270,226 | ||
Total investments | 1,890,078 | 1,613,687 | ||
Cash and cash equivalents | 105,573 | 65,891 | ||
Restricted cash | 45,783 | 34,445 | ||
Premiums receivable, net | 327,176 | 179,235 | ||
Reinsurance recoverables, net | 686,725 | 596,334 | ||
Ceded unearned premium | 236,962 | 186,121 | ||
Deferred policy acquisition costs | 119,910 | 91,955 | ||
Deferred income taxes | 18,502 | 21,991 | ||
Goodwill and intangible assets, net | 87,607 | 88,435 | ||
Other assets | 80,547 | 75,341 | ||
Total assets | $ | 3,598,863 | $ | 2,953,435 |
Liabilities and stockholders' equity | ||||
Liabilities: | ||||
Reserves for losses and loss adjustment expenses | $ | 1,568,777 | $ | 1,314,501 |
Unearned premiums | 692,452 | 552,532 | ||
Deferred ceding commission | 44,984 | 37,057 | ||
Reinsurance and premium payables | 200,967 | 150,156 | ||
Funds held for others | 102,219 | 58,588 | ||
Accounts payable and accrued liabilities | 73,001 | 50,880 | ||
Notes payable | 100,000 | 50,000 | ||
Subordinated debt, net of debt issuance costs | 18,956 | 78,690 | ||
Total liabilities | 2,801,356 | 2,292,404 | ||
Stockholders' equity | ||||
Common stock, $0.01 par value, 500,000,000 shares authorized, 40,099,931 and 39,863,756 shares issued and outstanding, respectively
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401 | 399 | ||
Additional paid-in capital | 716,095 | 710,855 | ||
Stock notes receivable | - | (5,562) | ||
Accumulated other comprehensive loss | (1,703) | (22,953) | ||
Retained earnings (accumulated deficit) | 82,714 | (21,708) | ||
Total stockholders' equity | 797,507 | 661,031 | ||
Total liabilities and stockholders' equity | $ | 3,598,863 | $ | 2,953,435 |
Condensed Consolidated Statements of Operations and Comprehensive Income | ||||||||
($ in thousands) | Three months ended September 30, | Nine months ended September 30, | ||||||
(unaudited) | 2024 | 2023 | 2024 | 2023 | ||||
Revenues: | ||||||||
Net earned premiums | $ | 269,557 | $ | 227,033 | $ | 763,482 | $ | 604,211 |
Commission and fee income | 1,818 | 2,085 | 5,897 | 5,817 | ||||
Net investment income | 19,521 | 13,089 | 59,956 | 26,318 | ||||
Net investment gains (losses) | 10,187 | (2,984) | 16,665 | 3,328 | ||||
Other loss | (195) | - | (202) | - | ||||
Total revenues | 300,888 | 239,223 | 845,798 | 639,674 | ||||
Expenses: | ||||||||
Losses and loss adjustment expenses | 170,521 | 138,536 | 473,489 | 377,841 | ||||
Underwriting, acquisition and insurance expenses | 79,817 | 68,315 | 226,270 | 176,653 | ||||
Interest expense | 2,229 | 2,632 | 7,405 | 7,250 | ||||
Amortization expense | 351 | 463 | 1,099 | 1,336 | ||||
Other expenses | 1,117 | 1,482 | 3,350 | 4,061 | ||||
Total expenses | 254,035 | 211,428 | 711,613 | 567,141 | ||||
Income before income taxes | 46,853 | 27,795 | 134,185 | 72,533 | ||||
Income tax expense | 10,185 | 6,084 | 29,763 | 15,814 | ||||
Net income | 36,668 | 21,711 | 104,422 | 56,719 | ||||
Net income attributable to participating securities | - | - | - | 1,492 | ||||
Net income attributable to common stockholders | $ | 36,668 | $ | 21,711 | $ | 104,422 | $ | 55,227 |
Comprehensive income: | ||||||||
Net income | $ | 36,668 | $ | 21,711 | $ | 104,422 | $ | 56,719 |
Other comprehensive income: | ||||||||
Unrealized gains and losses on investments: | ||||||||
Net change in unrealized gains (losses) on investments, net of tax | 31,396 | (8,722) | 24,527 | (5,309) | ||||
Reclassification adjustment for losses on securities no longer held, net of tax | (1,963) | (3,667) | (3,277) | (4,879) | ||||
Total other comprehensive income (loss) | 29,433 | (12,389) | 21,250 | (10,188) | ||||
Comprehensive income | $ | 66,101 | $ | 9,322 | $ | 125,672 | $ | 46,531 |
Share and Per Share Data
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($ in thousands, except share and per share amounts) | Three months ended September 30, | Nine months ended September 30, | |||||||
(unaudited) | 2024 | 2023 | 2024 | 2023 | |||||
Weighted average basic shares | 40,098,345 | 36,743,393 | 40,039,269 | 35,502,843 | |||||
Weighted average diluted shares | 41,428,557 | 38,403,843 | 41,302,108 | 37,830,431 | |||||
Basic earnings per share | $ | 0.91 | $ | 0.59 | $ | 2.61 | $ | 1.56 | |
Diluted earnings per share | $ | 0.89 | $ | 0.57 | $ | 2.53 | $ | 1.50 | |
Basic adjusted operating earnings per share | $ | 0.73 | $ | 0.68 | $ | 2.33 | $ | 1.55 | |
Diluted adjusted operating earnings per share | $ | 0.71 | $ | 0.65 | $ | 2.26 | $ | 1.49 | |
Annualized ROE (1)
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19.3% | 16.4 | % | 19.1 | % | 15.8% | |||
Annualized adjusted ROE (2)
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15.5 | % | 18.9 | % | 17.1 | % | 15.8 | % | |
Annualized ROTE (3)
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21.8% | 19.7 | % | 21.7 | % | 19.4 | % | ||
Annualized adjusted ROTE (4)
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17.5 | % | 22.8 | % | 19.4 | % | 19.4 | % | |
September 30 | December 31 | ||||||||
2024 | 2023 | ||||||||
Shares outstanding | 40,099,931 | 39,863,756 | |||||||
Fully diluted shares outstanding | 41,986,881 | 41,771,854 | |||||||
Book value per share | $ | 19.89 | $ | 16.72 | |||||
Fully diluted book value per share | $ | 18.99 | $ | 15.96 | |||||
Fully diluted tangible book value per share | $ | 16.91 | $ | 13.84 | |||||
(1) Annualized ROE is net income expressed on an annualized basis as a percentage of average beginning and ending stockholders' equity during the period
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(2) Annualized adjusted ROE is adjusted operating income expressed on an annualized basis as a percentage of average beginning and ending stockholders' equity during the period
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(3) Annualized ROTE is net income expressed on an annualized basis as a percentage of average beginning and ending tangible stockholders' equity during the period
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(4) Annualized adjusted ROTE is adjusted operating income expressed on an annualized basis as a percentage of average beginning and ending tangible stockholders' equity during the period
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($ in thousands) | Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
(unaudited) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
Pre-tax | After-tax | Pre-tax | After-tax | Pre-tax | After-tax | Pre-tax | After-tax | |||||||||
Income as reported | $ | 46,853 | $ | 36,668 | $ | 27,795 | $ | 21,711 | $ | 134,185 | $ | 104,422 | $ | 72,533 | $ | 56,719 |
Less (add): | ||||||||||||||||
Net investment gains (losses) | 10,187 | 8,048 | (2,984) | (2,357) | 16,665 | 13,165 | 3,328 | 2,629 | ||||||||
Net impact of loss portfolio transfer | 318 | 251 | 266 | 210 | 800 | 632 | 970 | 766 | ||||||||
Other loss | (195) | (154) | - | - | (202) | (160) | - | - | ||||||||
Other expenses | (1,117) | (882) | (1,482) | (1,171) | (3,350) | (2,647) | (4,061) | (3,208) | ||||||||
Adjusted operating income | $ | 37,660 | $ | 29,405 | $ | 31,995 | $ | 25,029 | $ | 120,272 | $ | 93,432 | $ | 72,296 | $ | 56,532 |
Three months ended September 30, | |||||||||
2024 | 2023 | % | |||||||
(unaudited) | As Reported | As Reported | Adjustment | Adjusted | Change | ||||
Ceded written premiums | $ | (131,692) | $ | (75,036) | $ | (50,462) | $ | (125,498) | 4.9% |
Net retention | 67.1% | 78.9% | 64.7% |
NM (1)
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Net written premiums | $ | 268,322 | $ | 280,696 | $ | (50,462) | $ | 230,234 | 16.5% |
Net earned premiums | $ | 269,557 | $ | 227,033 | $ | (13,145) | $ | 213,888 | 26.0% |
Nine months ended September 30, | |||||||||
2024 | 2023 | % | |||||||
As Reported | As Reported | Adjustment | Adjusted | Change | |||||
Ceded written premiums | $ | (502,326) | $ | (441,650) | $ | (50,462) | $ | (492,112) | 2.1% |
Net retention | 62.9% | 56.8% |
NM (1)
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Net written premiums | $ | 852,551 | $ | 696,574 | $ | (50,462) | $ | 646,112 | 32.0% |
Net earned premiums | $ | 763,482 | $ | 604,211 | $ | (13,145) | $ | 591,066 | 29.2% |
(1) Not meaningful
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($ in thousands) | Three months ended September 30, | Nine months ended September 30, | ||||||
(unaudited) | 2024 | 2023 | 2024 | 2023 | ||||
Income before federal income tax expense | $ | 46,853 | $ | 27,795 | $ | 134,185 | $ | 72,533 |
Add: | ||||||||
Interest expense | 2,229 | 2,632 | 7,405 | 7,250 | ||||
Amortization expense | 351 | 463 | 1,099 | 1,336 | ||||
Other expenses | 1,117 | 1,482 | 3,350 | 4,061 | ||||
Less: | ||||||||
Net investment income | 19,521 | 13,089 | 59,956 | 26,318 | ||||
Net investment gains (losses) | 10,187 | (2,984) | 16,665 | 3,328 | ||||
Other loss | (195) | - | (202) | - | ||||
Underwriting income | $ | 21,037 | $ | 22,267 | $ | 69,620 | $ | 55,534 |
($ in thousands) | Three months ended September 30, | Nine months ended September 30, | ||||||
(unaudited) | 2024 | 2023 | 2024 | 2023 | ||||
Net earned premiums | $ | 269,557 | $ | 227,033 | $ | 763,482 | $ | 604,211 |
Losses and LAE | 170,521 | 138,536 | 473,489 | 377,841 | ||||
Less: Pre-tax net impact of LPT | (318) | (266) | (800) | (970) | ||||
Adjusted losses and LAE | $ | 170,839 | $ | 138,802 | $ | 474,289 | $ | 378,811 |
Loss ratio | 63.3 | % | 61.0% | 62.0 | % | 62.5 | % | |
Less: net impact of LPT | (0.1) | % | (0.1)% | (0.1) | % | (0.2)% | ||
Adjusted loss ratio | 63.4 | % | 61.1 | % | 62.1 | % | 62.7 | % |
Combined ratio | 92.2 | % | 90.2 | % | 90.9 | % | 90.8 | % |
Less: net impact of LPT | (0.1) | % | (0.1)% | (0.1) | % | (0.2)% | ||
Adjusted combined ratio | 92.3 | % | 90.3 | % | 91.0 | % | 91.0 | % |
($ in thousands) | September 30, | December 31, | ||||
(unaudited) | 2024 | 2023 | 2023 | |||
Stockholders' equity | $ | 797,507 | $ | 535,397 | $ | 661,031 |
Less: Goodwill and intangible assets | 87,607 | 88,808 | 88,435 | |||
Tangible stockholders' equity | $ | 709,900 | $ | 446,589 | $ | 572,596 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
($ in thousands) | 2024 | 2023 |
% Change |
2024 | 2023 | % Change | |||||||||
Global Property & Agriculture | $ | 54,360 | $ | 48,775 | 11.5 | % | $ | 279,721 | $ | 247,195 | 13.2 | % | |||
Industry Solutions | 74,089 | 79,798 | (7.2)% | 236,460 | 226,680 | 4.3% | |||||||||
Captives | 53,630 | 41,886 | 28.0 | % | 184,137 | 127,249 | 44.7 | % | |||||||
Programs | 54,434 | 41,735 | 30.4 | % | 166,256 | 143,032 | 16.2 | % | |||||||
Transactional E&S | 44,885 | 30,699 | 46.2 | % | 132,791 | 90,948 | 46.0 | % | |||||||
Accident & Health | 43,490 | 39,554 | 10.0 | % | 128,479 | 112,819 | 13.9 | % | |||||||
Professional Lines | 40,310 | 48,259 | (16.5) | % | 120,655 | 114,420 | 5.4 | % | |||||||
Surety | 34,816 | 24,977 | 39.4 | % | 106,395 | 75,899 | 40.2 | % | |||||||
Total gross written premiums(1)
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$ | 400,014 | $ | 355,683 | 12.5% | $ | 1,354,894 | $ | 1,138,242 | 19.0% | |||||
(1) Excludes exited business
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