EX-99.1 2 tm2020003d1_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

 

Investor Presentation First Quarter 2020

 

 

2 Table of Contents I believe our niche strategy, exclusive distribution arrangements, and careful exposure management will leave us well - positioned for profitable growth exiting 2020. Larry Hannon, CEO & President 03 Summary Information 04 The ProSight Story 08 Business Execution 17 Balance Sheet Highlights 21 Appendix

 

 

3 Summary Information 1 Adjusted operating ROE is a non - GAAP measure. See Appendix for reconciliation of net income to adjusted operating income. 2 Combined Ratio, Loss and LAE Ratio (“LR”) and Expense Ratio (“ER”) shown on an adjusted basis, excluding the impact of WAQS. See Appendix slide 27 for reconciliation of referenced non - GAAP measures. 3 As of March 31, 2020 and excludes other. Other for 1Q 2020 (TTM) GWP was $10M. Other includes GWP from certain niches that are no longer part of our ongoing business. All GWP from exited niches are included in “Other” which consists of ( i ) primary and excess workers’ compensation coverage for Self - Insured Groups (ii) niches exited prior to 2018, many with a concentration in commercial auto, (iii) certain fronting arrangements in which all premium written is ceded to a third party, (iv) participati on in industry pools, and (v) emerging new business customer segments. Rating A - (Excellent) by A.M.Best Niches 40+ (as of 1Q 2020) Customer Segments 8 (as of 1Q 2020) • Specialty Property & Casualty Insurer • Founded in 2009 • Headquartered in Morristown, NJ • Publicly traded on the NYSE under ticker symbol “PROS” We are PROS Adjusted Operating ROE 1 (TTM) 11.0% Combined Ratio 2 (TTM) 97.9% (61.8% LR | 36.1% ER) Annual Gross Written Premium (TTM) 3 $916M

 

 

The ProSight Story Who we are, where we’ve been, and how we make a difference

 

 

5 We are experts that focus on and specialize in niches. Our focus on alignment by customer niche is how we make a difference • Our team - oriented, high - performance culture is built around supporting our customers • Focus on customer niches: refined homogeneous groups of customers with limited fragmentation • Differentiate through innovative products, services and third - party solutions • Our underwriting expertise helps drive our profitability • We strive to provide the best customer experience in the business — coupling technology with a human touch • Partner with expert, limited distribution and institutionalize those relationships OUR FOUNDING PRINCIPLES ProSight was built on the foundation that insurers can, and should, provide valuable solutions to customers — solutions that truly address their unique business needs. What we BELIEVE • Our structure and expertise around the customer niche enable us to create solutions for our customers that help their business thrive • We deliver our offerings through limited and expert distribution partners specific to each customer niche • Our agility, profit - first underwriting philosophy, and disciplined approach to growth contribute to our financial strength What we DO We are PROS Our Story

 

 

6 Our Executive Team A leadership team with deep expertise built from decades of experience.

 

 

7 Our History 2009 Founded by Joe Beneducci, CEO Larry Hannon, COO Bob Bailey, CUO 2010 Goldman Sachs & TPG Invest Funds in ProSight Acquired NYMagic for $230M 2011 GWP Surpasses $200M 2011 ProSight Opens Glendale CA Office 2013 GWP Surpasses $500M 2014 Featured on Inc. 5000 List of Fastest - Growing Private Companies 2015 GWP Surpasses $750M 2017 GWP Surpasses $830M 2019 Larry Hannon Named CEO & President 2010 ProSight Opens Morristown NJ Office 2016 ProSight Online for Customers Launches 2017 ProSight Launches Direct Bill for Customers 2013 ProSight Premiere Policy Launches 2019 ProSight Completion of IPO under ticker “PROS” 2019 ProSight Opens Ft. Lauderdale FL Office 2011 ProSight Opens New York NY Office 2012 GWP Surpasses $350M

 

 

Business Execution Designed around the customer to deliver results

 

 

9 GWP: $916M 2 (trailing twelve months) Niche - Focused Specialty Insurer Diversified portfolio with 8 customer segments and over 40 specialty niches 1 . 1 As of March 31, 2020. 2 Excludes other. Other 1Q 2020 (TTM) GWP was $10.3M. 3 New niches added within preceding 4 quarters. Media & Entertainment $126 Million o Film o Live Entertainment Marine & Energy $108 Million o Ocean Marine o Solar Contractors o Petroleum Services o Propane & Fuel Dealers Transportation $103 Million o Charter Bus o School Bus o Intermodal Transportation o Taxis Sports $32 Million o Motor Sports o Sports o Country Clubs o Aquatic Recreation (NEW) 3 Real Estate $172 Million o Builders Risk o Hotels o MetroBuilders o Residential o Manufactured Housing o Property Managers o Self Storage (NEW) 3 Professional Services $119 Million o Accountants o Credit Unions o Customs Brokers o Lawyers o Pest Control o Funeral Homes (NEW) 3 Construction $119 Million o Cranes o Scaffolding o Marine Contractors o Construction Managers o Federal Contractors o Luxury Home Builders o Specialty Trade Contractors Consumer Services $137 Million o Auto Dealers o Franchise Equipment Dealers o Professional Employer Organizations o Social Services o Parking Facilities (NEW) 3 o Snow & Ice Mgmt (NEW) 3 o Animal Welfare (NEW) 3

 

 

• 17 niches 1 • Focused, agency contracts appointed for 1 niche • Joint marketing to build brand awareness • ProSight maintains all underwriting authority • 3 niches 1 • ProSight maintains all underwriting authority • Aggregation play consistent with customer behavior • 21 niches 1 with 13 MGUs • Each provides exclusivity of some kind • IP is mutually shared while appointed • ProSight maintains parameters and determines guidelines around all claims • ProSight controls underwriting guidelines and reinsurance purchasing Retail 35% Wholesale 14% MGU 51% 10 Flexible Distribution Model NOTE: Percentages are based on existing customer segment GWP. 1 TTM as of March 31, 2020. We can reach the customer in various ways: MGUs, retailers, wholesalers, and direct. Customers Limited & Preferred Distribution Partners • No channel conflict • ~100 total distribution partners • > 70% GWP on exclusive basis • Ability to write business direct Key Model Highlights [ Breakdown of GWP (%) ]

 

 

11 Careful Exposure Management • Publicly Traded D&O • Medical Malpractice • Mortgage Insurance • Accident & Health • Travel Insurance We do not write • Event Cancellation • Opioid Manufacturers or Distributors • Personal Lines • Hospitals • Nursing Homes Workers’ comp book has minimal exposure to healthcare and first responders. “Each of our niches is run like a single purpose underwriting organization working through a dedicated and limited distribution partnership, such that we see market dynamics very clearly and very differently through that lens." — Bob Bailey, Chief Underwriting & Risk Officer 1 Policy information based off 2019 data. Excludes workers’ comp and surety. Policies with gross limits of $2M or less 85% 1

 

 

12 Customer Experience Built for Today Designed for what our customers need. Strive to provide best - in - class service • Rapid Emergency Response: On hand expert emergency service sent to mitigate damage • Digital Claims Submission: Fast and simple incident reporting from any device Claims Reporting Our systems are built to be accessible • ProSight Online: Powerful online customer portal for insureds and partners • ProSight Premiere: Fully custom policy administration & billing system 24 / 7 Portal Access There to help our customers • Over 99% “Awesome / Good” customer experience rating 1 • Unscripted Support — licensed, real and ready to help Contact Center “I expect and always receive outstanding service from ProSight Claims, but this was easy, seamless, and better than outstanding! Thank you!” — Claire B, Partner “We are thrilled with the updates you’ve made to your systems. We feel like this will cut down on a lot of our follow - ups to the insureds after they submit a loss.” — Stephanie B, Partner “Every time I call ProSight, it is a wonderful experience; from the patience they offer to answering all of my questions to the enthusiasm they have over the phone.” — Armani L, Partner Real Testimonials Our goal is to provide our insureds and partners with the best service possible. 1 92% “Awesome” rating and 7% “Good” rating based on 2019 Qualtrics Survey Data.

 

 

SYSTEMS INCLUDE 13 Innovative Proprietary Technology Platform Developed by us, for us, with the customer experience in mind • Modern, scalable, and digitally - enabled technology platform that simplifies and improves the insurance buying process and user experience, while allowing us to better manage our business. • Utilize cutting - edge systems: We employ a single policy administration/billing system, incident - reporting system, and reinsurance system • Proprietary dashboards deliver insight for day - to - day business decisions on a real - time basis • Strong mobile development capabilities allow customers and agents to interact with us easily and efficiently Customer Focused ProSight Online Customer Policy Access Digital Claims Submission Submit From Any Device ProSight API Application Programming Interface ProSight Direct Direct - to - Customer Platform Underwriting / Operational ProSight Premiere Policy Administration & Billing ClimberPortal Employee Training & Development PATI ProSight Artificial Textual Intelligence Chatbot ProSight Climber GPS Financial Monitoring & Reporting “ProSight's technology, operational platform and agile workforce allowed us to successfully transition to a 100% remote work environment within days of the initial impact of COVID - 19.” — Darryl Siry, Chief Technology & Operations Officer

 

 

14 “We constantly evaluate our underwriting portfolio to ensure it is best positioned for long - term profitability.” — Larry Hannon, CEO & President

 

 

60.5% 62.0% 60.7% 61.9% 3M19 3M20 15 Profitable Underwriting We focus on profitable underwriting, including loss ratio stability and a goal of expense ratio improvement • Inception - to - date (2011 to 2020) GAAP loss ratio of 63.7% for all business and 61.4% for existing customer segments • Selective entry (and exit) of niches is a part of our underwriting strategy • Purposeful historical low catastrophic loss exposure 1 — since 2011, catastrophic losses 1 have averaged less than 1.0 basis point. • ProSight expects 200 basis points of expense ratio improvement from 2019 by YE 2022 1 Catastrophe losses and LAE are any one claim, or group of claims, equal or greater than $1M related to a single PCS® designat ed catastrophe event. 2 Expense ratio shown is Adjusted Expense Ratio. See “Factors Affecting our Results of Operations (WAQS)” in the Appendix. 3 GWP shown as TTM. NOTE: Loss Ratios as presented, adjusted for Whole Account Quota Share, except where otherwise noted. See “Factors Affecting our Results of Operations (WAQS)” in the Appendix. General Liability 32% Commercial Auto 22% Primary Workers Comp 13% Misc. Lines 8% Property 14% Prof. Liability 5% Umbrella 6% Diversified by Line of Business 3 86% 14% 80% 20% - Casualty 3 - Property 3 - Admitted 3 - Non - Admitted (E&S) 3 Expense Ratio 2 34.9% 37.0% 36.6% 2017 2018 2019 Loss Ratio 3M19 3M20 Calendar Year Loss Ratio Accident Year Loss Ratio Catastrophic Loss 63.9% 59.6% 61.4% 61.0% 60.3% 61.6% 2017 2018 2019 1.3% 0.5% 0.4% 0.0% 0.0% 37.7% 35.8%

 

 

$73.4 $101.9 $118.0 $94.4 $107.1 $133.7 $79.3 $83.1 $94.7 $114.4 $119.9 $125.0 $112.6 $110.5 $119.3 $132.0 $132.7 $167.6 $22.2 $23.6 $30.0 $ 85.1 $ 92.2 $ 112.1 2017 2018 2019 Transportation Sports Real Estate Professional Services Media and Entertainment Marine and Energy Consumer Services Construction $713.4M 1 $771.0M 1 16 Strong Premium Growth 1 Existing customer segment only; actual GWP are $836M for 2017, $895M for 2018, and $968m for 2019; $256m for 1Q19 and $214m f or 1Q20. 2 CAGR for actual GWP from 2017 to 2019 is 7.6%. Growth for actual GWP 3M2019 to 3M2020 is (16.4%). Future growth within any niche or customer segment considers profitability first . ProSight employs a rigorous process to identify if/when growth is justified and react quickly once a decision is made. Growth in Existing Niches New Customer Segments New Niches in Existing Customer Segments WE GROW IN THREE WAYS: Existing Customer Segments Only $900.4M 1 $23.3 $24.5 $27.5 $30.6 $19.8 $32.8 $29.7 $30.5 $29.6 $29.7 $28.7 $33.2 $7.8 $9.5 $ 30.7 $ 21.5 3M19 3M20 $197.1M 1 $212.3M 1

 

 

Balance Sheet Highlights

 

 

18 Diversified & Liquid Investment Portfolio • $2.2 billion conservatively managed investment portfolio • No common stocks, private equity, CLO equity or venture capital • CLO and CMBS allocation average rating AA with no securities below single A • Floating rate allocation 16% • TTM investment yield of 3.0% • Portfolio duration of 4.1 years vs. loss reserve duration of 5.2 years Fixed Income Securities 93.1% Short - term Investments 0.9% Cash and Cash Equivalents 2.4% Commercial Levered Loans 0.6% Limited Partnerships and LLCs 3.0% U.S. Gov't & Gov't Agency 3.6% Corporate Securities 65.0% Municipals 5.0% ABS 2.3% CLO 7.9% CMBS 4.7% RMBS 11.5% A 32.6% AA 21.6% AAA 9.4% BBB 25.6% Below BBB/ Not Rated 10.8% 36.2 56.0 68.9 2017 2018 2019 NOTE: All financial information as of March 31, 2020, unless otherwise noted. Maximizing investment income while minimizing volatility Net Investment Income ($ in millions) Investment Portfolio Composition Fixed Income Securities (by type) Fixed Income Securities (by rating) NOTE: ProSight outsources investment management to leading 3 rd - party fixed income managers. 1Q19 1Q20 17.2 8.8

 

 

39% 15% 23% 2% 3% 6% 12% General Liability Commercial Auto Excess WC Property Misc Lines Prof Liability Primary WC Net Loss Reserve Detail at 1Q20 ($ in millions) 19 Prudent Loss Reserve Position Sound loss reserve position • Total net loss reserves of $1.4 billion • Exited niches excluding Excess Workers’ Compensation business ($32.0M of net loss reserves) and A&E exposures ($12.8M of net loss reserves) are not significant to aggregate reserves • Duration of loss reserves: 5.2 years Net Loss Reserves by Line of Business (%) Net Reserve Development 2Q18 - 1Q20 (fav / (unfav) %) NOTE: All financial information as of March 31, 2020, unless otherwise noted. ** The ratio above represents development over NEP for the quarter 0.8% 0.8% 0.5% 0.2% 2.4% - 1.9% 0.0% - 0.1% 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 Chart Title 1388.9 32 .0 24.2 12.8 Total Net Loss Reserves Exited Niches UK Exposure A&E Exposures

 

 

20 Disclaimer Important Notice This presentation contains forward - looking statements. Forward - looking statements include statements relating to future developm ents in our business or expectations for our future financial performance and any statement not involving a historical fact. Forward - looking statements use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “should,” “seek,” and other words and term s o f similar meaning. Forward - looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our c ontrol. We caution you that forward - looking statements are not guarantees of future performance or outcomes and that actual performance and outcomes may differ materially from those made in or suggested by the forward - looking statements contained in this presentation. In addition, even if our results of operations, financial condition and cash flows, and the development of the market in which we operate, ar e consistent with the forward - looking statements contained in this presentation, those results or developments may not be indicative of resul ts or developments in subsequent periods. New factors emerge from time to time that may cause our business not to develop as we exp ect , and it is not possible for us to predict all of them. For a discussion of some of the risks and important factors that could affect ou r future results and financial conditions, see our filings with the U.S. Securities and Exchange Commission, including, but not limited to, the ri sks and uncertainties included under the caption “Risk Factors”. Except as required by law, we undertake no obligation to publicly u pda te any forward - looking statements, whether as a result of new information, future events or otherwise. Presentation of Financial Information This presentation includes certain “non - GAAP” financial measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with generally accepted accounting principles in th e United States (“GAAP”). The non - GAAP financial measures used in this presentation are adjusted operating income, adjusted operating ret urn on equity, and adjusted loss ratio. These non - GAAP financial measures should not be considered in isolation or viewed as a substit ute for their most directly comparable GAAP figures. Other companies may calculate such non - GAAP financial measures differently. Accordingly, these measures may not be comparable to similarly titled measures of other companies. See the Appendix for a reconciliation of thes e n on - GAAP financial measures to the most comparable GAAP figures.

 

 

Appendix 1Q 2020

 

 

22 Contacts Corporate Headquarters 412 Mt. Kemble Avenue, Suite 300C Morristown, NJ 07960 973 - 532 - 1900 Investor Relations Jeff Arricale 973 - 532 - 1710 jarricale@prosightspecialty.com Media & Public Relations Joe Hathaway 973 - 532 - 1706 jhathaway@prosightspecialty.com

 

 

March 31 2020 2019 2018 2017 2016 Assets (as restated) (as restated) (as restated) Investments: Fixed maturity securities, available-for-sale at fair value 2,002,420$ 2,040,682$ 1,693,382$ 1,484,431$ 1,222,234$ Commercial levered loans at amortized cost 13,725 14,069 16,915 24,500 29,834 Non-redeemable preferred stock securities at fair value 11,378 Limited partnerships and limited liability companies at fair value 65,011 66,660 53,432 41,603 33,383 Short-term investments 19,229 43,873 36,661 4,223 44,922 Total investments 2,111,763 2,165,284 1,800,390 1,554,757 1,330,373 Cash and cash equivalents 43,141 17,284 22,279 59,397 75,211 Restricted cash 8,786 10,213 7,621 18,475 – Accrued investment income 13,812 13,610 12,279 9,409 5,353 Premiums and other receivables, net 156,241 190,004 200,347 184,334 168,378 Reinsurance receivables paid 4,876 3,481 12,428 17,220 28,876 Reinsurance receivables unpaid 156,866 193,952 185,295 201,156 176,651 Deferred policy acquisition costs 99,842 98,812 93,613 60,759 76,572 Prepaid reinsurance premiums 40,383 42,861 44,626 122,950 30,896 Net deferred income taxes 20,598 4,803 33,239 37,068 76,784 Goodwill and net Intangible assets 29,181 29,189 29,219 29,249 29,745 Fixed assets and capitalized software, net 36,313 37,167 39,001 37,834 33,068 Funds withheld related to sale of affiliate 19,529 19,453 19,397 26,988 – Other assets 21,615 29,537 57,653 37,159 24,765 Assets of discontinued operations 23,342 21,584 19,719 12,697 194,831 Total assets 2,786,288$ 2,877,234$ 2,577,106$ 2,409,452$ 2,251,503$ Liabilities    Unpaid losses and loss adjustment expenses 1,545,799$ 1,521,648$ 1,396,812$ 1,258,237$ 1,166,619$ Reserve for unearned premiums 468,486 483,223 435,933 395,432 354,828 Ceded reinsurance payable 13,148 17,768 13,281 18,448 2,816 Notes payable, net of debt issuance costs 164,778 164,693 182,355 164,017 163,678 Funds held under reinsurance agreements 23,374 58,855 63,165 112,260 20,589 Other liabilities 48,843 56,438 73,474 71,014 21,522 Liabilities of discontinued operations 33,758 31,578 22,256 14,061 140,796 Total liabilities 2,298,186 2,334,203 2,187,276 2,033,469 1,870,848 Shareholders’ equity Common stock, $0.01 par value 433 431 389 389 389 Paid-in capital 661,203 661,761 607,589 606,672 555,589 Accumulated other comprehensive income (loss), net of taxes (23,988) 37,453 (22,315) 19,298 29,482 Retained deficit (149,346) (156,414) (195,304) (249,847) (204,271) Treasury shares - at cost (12,920 shares) (200) (200) (200) (200) (200) Total shareholders’ equity 488,102 543,031 389,830 375,983 380,655 Total liabilities and shareholders’ equity 2,786,288$ 2,877,234$ 2,577,106$ 2,409,452$ 2,251,503$ December 31 23 Balance Sheet Note: For informational purposes only and should be read in conjunction with documents filed by ProSight Global, Inc. with th e S ecurities and Exchange Commission, including the most recent prospectus on Form S - 1 and Quarterly Reports on Form 10 - Q. Unaudited

 

 

24 Income Statement NOTE: Quarterly income statement reported, not audited. Unaudited Trailing Twelve Months Ended March 31 2020 2020 2019 2019 2018 2017 2016 Revenues: Net premiums earned 817,908$ 205,662$ 195,608$ 807,854$ 730,785$ 609,786$ 675,778$ Net investment income 60,554 8,815 17,158 68,897 55,971 36,196 28,052 Realized investment gains (losses) , net 889 232 113 770 (1,557) 4,204 (6,147) Other income, net 557 112 93 538 673 853 1,057 Total revenues 879,908 214,821 212,972 878,059 785,872 651,039 698,740 Expenses: Net losses and loss adjustment expenses incurred 510,249 127,557 118,333 501,025 434,830 393,741 489,464 Policy acquisition expenses 185,184 46,986 46,573 184,771 171,429 126,023 152,923 General and administrative expenses 105,129 26,637 27,194 105,686 100,118 87,821 88,950 Interest expense 12,538 3,105 3,362 12,795 12,377 12,125 12,125 Other expense 17,888 1,737 – 16,151 – – – Total expenses 830,988 206,022 195,462 820,428 718,754 619,710 743,462 Income (loss) from continuing operations before income taxes 48,920 8,799 17,510 57,631 67,118 31,329 (44,722) Income tax provision: Current 1,305 1,631 141 (185) (853) 864 99 Deferred 9,005 357 3,674 12,322 14,242 37,369 (24,087) Total income (loss) tax expense (benefit) 10,310 1,988 3,815 12,137 13,389 38,233 (23,988) Income (loss) from continuing operations 38,610 6,811 13,695 45,494 53,729 (6,904) (20,734) Discontinued operations: Income (loss) from discontinued operations (6,092) 257 (255) (6,604)$ 814$ (37,089) (79,594) Net Income(loss) 32,518$ 7,068$ 13,440$ 38,890$ 54,543$ (43,993)$ (100,328)$ Year Ended December 31Three Months Ended March 31

 

 

25 Non - GAAP Reconciliation NOTE: Quarterly income statement reported, not audited. Unaudited 2019 2018 2017 2016 Net income (loss) from continuing operations 45,494$ 53,729$ (6,904)$ (20,734)$ Income tax expense (benefit) 12,137 13,389 38,233 (23,988) Income (loss) before taxes 57,631 67,118 31,328 (44,722) Other Expense 16,151 - - - Net investment gains/(losses) (770) 1,557 (4,204) 6,147 Adjusted operating income/(loss) before taxes 73,012 68,675 27,124 (38,575) Less: income tax expense on adjusted operating income 15,376 13,389 13,133 (23,988) Adjusted operating income 57,636 55,286 13,991 (14,587) December 31 Trailing Twelve Months Ended March 31 2020 2020 2019 Net income (loss) from continuing operations 38,610$ 6,811$ 13,695$ Income tax expense (benefit) 10,310 1,988 3,815 Income (loss) before taxes 48,920 8,799 17,510 Other Expense 17,888 1,737 - Net investment gains/(losses) (889) (232) (113) Adjusted operating income before taxes 65,919 10,304 17,397 Less: income tax expense on adjusted operating income 13,889 2,328 3,815 Adjusted operating income 52,030$ 7,976$ 13,582$ Three Months Ended March 31

 

 

26 Supplementary Underwriting Information NOTE: Quarterly income statement reported, not audited. Unaudited Trailing Twelve Months Ended March 31 2020 2020 2019 2019 2018 2017 2016 Gross written premiums 925,957$ 213,784$ 255,838$ 968,011$ 895,112$ 836,334$ 771,995$ Net written premiums 832,421 190,183 209,902 852,140 850,074 560,286 686,683 Net premiums earned 817,908 205,662 195,608 807,854 730,785 609,786 675,778 Net losses and loss adjustment expenses 510,249 127,557 118,333 501,025 434,830 393,741 489,464 Catastrophe loss and loss adjustment expenses 3,000 – – 3,000 3,560 8,865 7,938 Unfavorable/(favorable) prior period reserve development 3,747 198 (395) 3,154 (5,071) 20,319 60,082 Underwriting, acquisition and inurance expenses 290,313 73,623 73,767 290,457 271,547 213,844 241,873 Policy acquisition expenses 185,184 46,986 46,573 184,771 171,429 126,023 152,923 General and administrative expenses 105,129 26,637 27,194 105,686 100,118 87,821 88,950 Underwriting Income 17,346$ 4,482$ 3,508$ 16,372$ 24,409$ 2,201$ (55,559)$ Underwriting Ratios Ex-CAT current accident year loss and LAE ratio 61.6% 61.9% 60.7% 61.2% 59.7% 59.8% 62.4% Catastrophe loss and LAE ratio 0.4% 0.0% 0.0% 0.4% 0.5% 1.5% 1.2% Unfavorable/(favorable) prior period reserve development ratio 0.5% 0.1% -0.2% 0.4% -0.7% 3.3% 8.9% Loss and LAE ratio 62.4% 62.0% 60.5% 62.0% 59.5% 64.6% 72.4% Policy acquisition expense ratio 22.6% 22.8% 23.8% 22.9% 23.8% 22.5% 22.6% General and adminstrative expense ratio 12.9% 13.0% 13.9% 13.1% 13.4% 12.6% 13.2% Expense Ratio 35.5% 35.8% 37.7% 36.0% 37.2% 35.1% 35.8% Combined Ratio 97.9% 97.8% 98.2% 98.0% 96.7% 99.7% 108.2% Adjusted Underwriting Ratios Ex-CAT current accident year loss and LAE ratio 61.0% 61.9% 60.7% 61.2% 59.8% 60.6% 63.5% Catastrophe loss and LAE ratio 0.4% 0.0% 0.0% 0.4% 0.5% 0.0% 0.0% Unfavorable/(favorable) prior period reserve development ratio 0.5% 0.1% -0.2% -0.2% -0.7% 3.3% 8.9% Adjusted Loss and LAE ratio 61.8% 62.0% 60.5% 61.4% 59.6% 63.9% 72.4% Policy acquisition expense ratio 23.2% 22.8% 23.8% 23.5% 23.6% 22.3% 22.6% General and adminstrative expense ratio 12.9% 13.0% 13.9% 13.1% 13.4% 12.6% 13.2% Adjusted Expense Ratio 36.1% 35.8% 37.7% 36.6% 37.0% 34.9% 35.8% Adjusted Combined Ratio 97.9% 97.8% 98.2% 98.0% 96.6% 98.8% 108.2% Year Ended December 31Three Months Ended March 31

 

 

27 Factors Impacting the Results of Operations (WAQS) NOTE: Quarterly income statement reported, not audited. Unaudited Trailing Twelve Months Ended March 31 2020 2020 2019 2019 2018 2017 2016 Gross written premiums –$ –$ –$ –$ –$ –$ –$ Ceded written premiums 3 – – 3 58,857 (160,779) – Net written premiums 3 – – 3 58,857 (160,779) – Net premiums earned 3 - – 3 (14,560) (87,362) – Net losses and LAE 4,746 – – 4,746 (9,514) (51,897) – Underwriting, acquisition and insurance expenses (4,743) – – (4,743) (3,955) (29,560) – Underwriting income (loss) – – – – (1,091) (5,905) – Adjustment to loss and LAE ratio -0.6% 0% 0% -0.6% 0.1% -0.7% 0.0% Adjustment to expense ratio 0.6% 0% 0% 0.6% -0.2% -0.2% 0.0% Adjustment to combined ratio 0.0% 0% 0% 0.0% -0.1% -0.9% 0.0% Adjusted loss and LAE ratio 61.8% 62.0% 60.5% 61.4% 59.6% 63.9% 72.4% Adjusted expense ratio 36.1% 35.8% 37.7% 36.6% 37.0% 34.9% 35.8% Adjusted combined ratio 97.9% 97.8% 98.2% 98.0% 96.6% 98.8% 108.2% Three Months Ended March 31 Year Ended December 31

 

 

28 Share & Per Share Information NOTE: Quarterly income statement reported, not audited. 2020 2019 2019 2018 2017 2016 Shares Outstanding 43,342 38,851 43,058 38,851 38,743 35,453 Fully Diluted Shares Outstanding 45,501 39,455 45,197 39,455 39,441 36,083    Book Value Per Share (2) 11.26$ 10.99$ 12.61$ 10.03$ 9.70$ 10.74$ Book Value Per Share (Fully Diluted) (2) 10.73$ 10.82$ 12.01$ 9.88$ 9.53$ 10.55$ Tangible Book Value Per Share (2) 10.59$ 10.24$ 11.93$ 9.28$ 8.95$ 9.90$ Tangible Book Value Per Share (Fully Diluted) (2) 10.09$ 10.08$ 11.37$ 9.14$ 8.79$ 9.72$ Weighted Average Basic Shares Outstanding 43,910 38,851 41,095 38,753 37,555 35,376 Weighted Average Diluted Shares Outstanding 44,274 39,455 41,523 39,441 37,555 35,376 Earnings per Share - Basic:    Net income from continuing operations 0.16$ 0.35$ 1.11$ 1.39$ (0.18)$ (0.59)$ Adjusted operating income (1) 0.18$ 0.35$ 1.40$ 1.43$ 0.37$ (0.41)$ Earnings per Share - Diluted:    Net income from continuing operations 0.15$ 0.35$ 1.10$ 1.36$ (0.18)$ (0.59)$ Adjusted operating income (1) 0.18$ 0.34$ 1.39$ 1.40$ 0.37$ (0.41)$ Adjusted operating return on equity (ROE) (3) 6.2% 13.3% 12.4% 14.4% 3.7% -3.6% Adjusted operating return on tangible equity (ROTE) (3) 6.6% 14.3% 13.2% 15.6% 4.0% -3.8% Three Months Ended March 31 Year Ended December 31 Unaudited

 

 

Gross Written Premium by Segment 29 NOTE: Quarterly reported, not audited. Unaudited Trailing Twelve Months Ended March 31 (in $000s) 2020 2020 2019 2019 2018 Customer Segment Construction 119,184$ 24,515$ 23,248$ 117,918$ 101,946$ Consumer Services 136,764 30,568 27,485 133,682 107,086 Marine and Energy 107,678 32,790 19,812 94,700 83,104 Media and Entertainment 125,725 30,467 29,692 124,950 119,925 Professional Services 119,462 29,698 29,562 119,326 110,546 Real Estate 172,115 33,215 28,735 167,635 132,652 Sports 31,794 9,565 7,850 30,079 23,590 Transportation 102,902 21,468 30,757 112,191 92,169 Customer Segment Subtotal 915,624$ 212,284$ 197,142$ 900,481$ 771,019$ Other 10,334 1,500 58,696 67,530 124,093 Total 925,958$ 213,784$ 255,838$ 968,011$ 895,112$ Three Months Ended March 31 Year Ended December 31